DVD Disc production can't keep up with demand.....................
kipinet.com
DVD Replication Capacity Could Fall Short This Holiday Season
July 12 -- This holiday season may see content owners fighting for space at DVD replication facilities, as demand for discs exceeds easily available capacity, at least at the largest facilities. Replicators surveyed by DVD Report say they expect to be operating at or above capacity at the end of the year, with the additional orders being either turned away or off-loaded to partner facilities. At the same time, some replicators contend that only a handful of factories are manufacturing top-quality discs, making the push for DVD capacity at those upper-tier facilities even stronger. And because demand for CD is also expected to be high, replicators will probably avoid switching lines back and forth between CD and DVD.
Warner Advanced Media Services (WAMO; Olyphant, PA) expects to compensate for heavy demand by tapping its Worldwide Affiliate Program. The affiliate program gives manufacturers exclusive replication rights in a determined territory to manufacture DVDs for Warner Home Video, PC OEMs and other movie studios that have contracted with WAMO. Currently, seven companies (in Taiwan, Malaysia, Australia, Brazil, Germany, South Africa and Japan) are approved replicators, and while the facilities wait for local demand to materialize, WAMO keeps them busy making discs for international clients.
"On average, we have utilized 65 percent of our own capacity," says pre-production engineer Gregg Johnson. WAMO's East Coast capacity is 130,000 units/day, and West Coast capacity will reach 20,000 units/day by mid-September. "During the third and fourth quarters, we will utilize the Affiliate Program to realize an additional 140,000 units/day," adds Johnson.
Sony Disc Manufacturing (Terre Haute, IN) is adding capacity "as we speak," according to Scott Bartlett, vice president, custom entertainment group. Sony will double capacity within the year as DVD-ROM becomes a factor, he says. Bartlett expects next-generation Playstation and Nintendo games to be the driving force behind a surge in the ROM sector.
Established Facilities In High Demand
Throughout spring, Nimbus CD International, a Technicolor Co. (Charlottesville, VA), was operating at 80 percent of DVD capacity, and Bob Headrick, executive vice president, optical media sales and marketing, predicts that demand will nearly double in the not-too-distant future. Nimbus offers DVD replication at three facilities worldwide - capacity in Wales is 6 million/year; in Virginia, 34 million/year; and in California, 20 million/year. Headrick says he expects a crush at leading DVD replicators, with customers jockeying for position at the plants with reputations for pressing the highest-quality discs.
Harvey Mabry, general manager of sales and marketing at Panasonic Disc Services (Torrance, CA), agrees that demand will be strong through the season, with established plants taking up slack for DVD start-ups that have bitten off more than they can chew. For its own part, PDSC is already running at full tilt. "Currently, we have eight lines that run 10,000 DVDs/day, and we are at maximum utilization. We will be up to 12 lines in time for the Christmas season," Mabry says.
CD Vs. DVD: A Balancing Act
When the holiday crush hits in earnest, longtime CD replicators will have to figure out how to win new customers without alienating the old ones. "Our lines are DVD-specific," explains Sean Smith, sales and marketing manager for JVC Disc America (Sacramento, CA), where six DVD lines are currently running at 60 percent of their 900,000 disc/month capacity. "You lose efficiencies when you switch back and forth from DVD to CD, therefore DVD capacity will definitely be tight this fall."
"One of the toughest decisions I'll have to make this season will be how to divide lines between CD and DVD," agrees Bob Spiller, president of Sonopress (Asheville, NC). "I have to be loyal to our CD customers, yet I need to establish the new DVD business."
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