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Technology Stocks : C-Cube
CUBE 37.53-0.2%Jan 30 3:59 PM EST

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To: Stoctrash who wrote (23240)9/30/1997 2:44:00 PM
From: John Rieman   of 50808
 
DVDs, why not just put them in the dishwasher..................................

Disney's Vow Helps Pump Life Into Dvd Industry Expects Boom This Year

The Sacramento Bee
Sun, Sep 28 1997

Moviemakers are lining up to support DVD, the new home entertainment technology that looked a bit shaky only months ago.

Although DVD machines deliver pictures, sound and features far superior to videocassette recorders', there were worries that a lack of videos for the equipment might stall or perhaps derail the DVD train. Those concerns seem to be quickly eroding.

Some studios, such as Warner Bros., made a commitment to DVD early on. But getting the Walt Disney Co. involved was "essential for DVD to be a success," according to a recent report from Sanford C. Bernstein & Co.

Disney finally jumped off the fence and made a vow to DVD two weeks ago.

DVD, which stands for "digital video disc" and "digital versatile disc," first hit store shelves in March. But that was a market test, largely limited to seven markets. The tests ended a few weeks ago, and DVDs are being distributed nationally after sales in the test markets exceeded expectations.

About 180,000 players have been sold nationally, said Jonathan Thompson, vice president of the Consumer Electronics Manufacturers Association. Far more will find their way into homes by the end of the year, industry analysts and executives predict.

At the moment, general consumers' familiarity with DVDs is scant. There have been no massive ad campaigns. Most buyers so far have been either folks who like to be first on the block with the latest gizmo or connoisseurs of audio-video equipment.

Similar in appearance to a CD player, a DVD machine is a box with a slot and a bunch of buttons. It plays videos on silvery discs that are superficial twins of CDs. A DVD can hold 135 minutes of material on each side, enough for a four-hour epic or two regular-length movies. Discs are generally priced in the $20 to $25 range.

And unlike videotape, a disc is almost jam-proof and can even be washed.

But the most impressive selling points for DVD may be the options that have never been available in home entertainment:

* The picture quality can be a stunning 90 percent better than that provided by a VCR, according to tests.

* Viewers can choose to view a scene from different angles. Several foreign languages can be used for dialogue either dubbed or as subtitles.

* Rather than the tedious rewinding or fast-forwarding necessary to find a certain scene on videotape, DVD players can skip through a disc almost instantly to find a designated "chapter" in a video.

However, the current crop of DVD players comes with some massive drawbacks:

* Unlike VCRs, they can't record anything. That problem won't go away soon.

* DVD players come at a dear price. The least expensive models typically carry price tags of $499, while a good VCR can be had for half that.

"As an affordable consumer product at, say, under $1,000, I don't expect it (a recording DVD machine) to be in the marketplace before the year 2000," said Steve Nickerson, vice president of marketing for Toshiba America Consumer Products. "It requires the efficient applications of technologies that are only now being developed."

And it could be a very long time before DVDs, even with recording capability, replace VCRs. Those machines are close to the hearts of Americans, and almost 90 percent of U.S. households have at least one VCR.

One holdup for DVD may be that the video rental industry is not pushing the new technology by offering DVD titles or displaying the players in a big way. Blockbuster, the world's largest video renter, is especially blunt about its feelings on DVD.

"We can't get too enthusiastic about it right now because it's so brand-new and limited in scope," company spokesman Wade Hyde said. "We're still looking at DVD, but the thrust of our business is video rental. There's a huge difference in that almost every house in America has a VCR and literally a handful of people have DVD players."

But Toshiba, for instance, doesn't see rentals as the way to go with DVDs, anyway.

"Given the right quality and prices, consumers will take the same approach of collectibility with movies as they do with books," Nickerson said. And relatively few people read books more than once.

Nonetheless, "do you know any houses without bookshelves?" Nickerson asked. "That whole argument of `I only watch it once' does not have to be."

Backing him up are industry studies anticipating that revenue from sales of videotapes this year will, for the first time, surpass the revenue of tape rentals.

The DVD industry is taking great comfort from the growing numbers of DVD movies.

"There are more than 200 now, and there will be between 350 and 500 by the end of the year," said Mike Piehl, director of marketing for Philips DVD, which offers players under the Philips-Magnavox brand.

About 500,000 DVDs have been sold by retailers, and stores and distributors have on hand perhaps a million discs, according to the Consumer Electronics Manufacturers Association.

Disney's entry "is a rousing endorsement of the DVD concept," Thompson said. "What Disney brings is a vast library of children's movies and family entertainment."

In many homes with children, Disney tapes -- especially animated features such as "The Lion King" -- are considered essentials. Kids watch them dozens of times.

Of all the movie studios' offerings, "Disney's animation properties lend themselves best to DVD for two reasons," said a report by industry analyst Tom Wolzien.

"First, because people have been in the habit of collecting Disney movies, and second, because DVD is far more convenient because it doesn't jam like `The Lion King' on the 100th viewing, and it can be washed off when smeared with peanut butter and jelly."

Disney officials are tight-lipped about just when they'll offer DVDs, saying only that the products will come before the end of the year. There's little doubt in the industry that Disney will offer at least some titles in time for Christmas.

Despite the growing library of all sorts of DVDs, some potential DVD buyers may hold back because they've been stuck before with high-dollar entertainment equipment that didn't pan out.

Remember Beta? Anyone in the mood for a digital audio tape deck?

The likelihood of a DVD player-recorder a few years away could discourage some prospects from buying what's only a player now.

Still, the prospects for DVD look fairly bright, said Tom Edwards of NPD Intelect, a research firm.

Christmas could be a boon for DVD. Retailers are expected to sell 800,000 DVD players this year and maybe 1.2 million next year, a 50 percent increase and a conservative estimate, according to Edwards.

(Copyright 1997)

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