Falling Prices Help Boost Sales of Digital Video Disc Players, Movies
Lila LaHood
12/15/98
KRTBN Knight-Ridder Tribune Business News: Fort Worth Star-Telegram, Texas
Copyright (C) 1998 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)
FORT WORTH, Texas--Kelly Pierce saw digital video discs coming and she ran to meet the train.
She convinced her business partner at Visions Video on Eastchase Parkway that they needed to stock the new discs before three nearby video stores could beat them to it. "I said, 'We have to be the first ones on the block,' " she recalled.
The discs offer clearer pictures than videotapes and give movie studios an opportunity to include interactive options, such as allowing viewers to choose camera angles and pick the movie's ending.
Despite such lures, the discs didn't exactly fly off the shelves when the store started carrying them in March, Pierce said. But a combination of less expensive players -- the price of DVD players dropped from $500 to less than $300 this fall -- a rapidly expanding list of titles and disc-rental options has pumped up demand.
Now the store's 100-plus DVD titles are rented out every weekend, Pierce said.
The Consumer Electronics Manufacturers Association reported in mid-November that manufacturers have shipped more than 1 million DVD players since March 1997, when the product debuted in stores.
Topping the 1 million mark gives DVD the kind of exposure needed to accelerate sales even faster, association spokesman Jim Barry said. At that level, production becomes more efficient and manufacturers begin to lower prices and invest in the next generation of the product, he said.
"When you hit a million units of a new product in people's homes, you get neighbors over there seeing it," he said.
Stuart Schuster, president of Marvin Electronics Co. in Fort Worth, said it's not just technophiles who are buying DVD players. "Everybody that wants entertainment is buying it," he said.
"We're selling everything we can get," Schuster said. The South Hulen Street store carries several models ranging in price from $400 to $2,000.
Fort Worth resident Erik Clapp, 25, bought a DVD player in October, despite his attachment to laser discs.
"When DVD started coming out, it was harder to find laser discs," he said. "There was no other choice if you wanted to stay digital."
Officials with Best Buy, the first national retailer to carry DVD players, said the product has been a good one for them. The company has sold more than 100,000 players and 2 million movie discs since the technology appeared on the market.
"They've sold above our expectations since they were first launched," said Best Buy spokeswoman Laurie Bauer. "The future of DVD looks great."
Best Buy stores carry nine models of players, ranging from $299 to $1,000 for a combined DVD/laser disc player.
Circuit City carries DVD players in the same price range and also DVD Divx machines, which range in price from $399 to $549, somewhat higher than the cheapest DVD player alone. Divx players can read special Divx discs, which are cheaper than DVD discs but have limited playing times, as well as regular DVD discs. A regular DVD disc costs about $20; a Divx disc costs $4.49 but is limited to 48 hours of viewing time. A countdown starts the first time the disc is played. After 48 hours, owners can only watch the disc again by paying an additional fee that the Divx player bills through a modem connection.
The cost of renting DVD movies is comparable to renting videotapes, although the selection of DVDs is smaller. Bergeron's TV and Video on Meadowbrook Drive in Fort Worth began renting DVD movies almost four months ago and currently offers about 75 titles. J.J.'s Video on Denton Highway in Watauga has carried them since Thanksgiving and has about 40 titles.
Pierce, of Visions Video, said most of the DVDs that she carries cost the store between $17 and $20. VHS rental tapes usually cost between $20 and $90. Although the DVDs are cheaper, they also scratch easily and aren't as sturdy as VHS tapes, she said. The movie studios only guarantee DVDs for 20 rentals. "We've got tapes on our walls that are 9 years old," she said.
Blockbuster Entertainment Group spokeswoman Stephanie Cota said the video rental chain has not experienced problems with rental DVDs. The company began trial DVD rentals in 100 stores in April and now offers a selection of 350 DVD movies in 500 of its 6,000 stores, compared with about 10,000 rental tapes at each store, Cota said. Blockbuster also carries DVD players for rent.
Despite their higher quality audio and video capabilities, DVD players won't spell the end for VCRs quite yet, Barry and others said. For one thing, you can't use DVD players to record your favorite TV shows or to watch home videos.
"I don't think you're going to see it impact video cassette sales until (DVDs) become recordable," Barry said.
And the selection of movies available on DVD, though growing, is not comprehensive. The major movie studios have said that they will release new movies on both VHS and DVD, but some recent megahits, like Titanic, are conspicuously absent.
But if DVD survives, despite the current limitations, it could find its way into more than 20 percent of American homes within five years, Barry said.
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