DVD-ROM sales are strong and prices are dropping...............
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PC MANUFACTURERS CAN'T GET THEIR HANDS ON DVD-ROM TITLES: DESPITE CONTENT DEARTH, MICRON IS EXPERIENCING BIG DVD DEMAND
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PC manufacturers brave enough to incorporate DVD-ROM drives in their fourth quarter offerings are taking a huge leap of faith because there is a lack of titles available now and no indication they'll be available this year.
While the video industry is putting forth millions of dollars and hundreds of movies to accompany second-generation hardware efforts, PC companies have no such guarantees.
Despite the lack of content, Micron Electronics Inc. [MUEI] is experiencing better sales of DVD-enabled PCs than expected and is lowering prices after selling the drives for only two months.
"I've been selling so much I can drop the price down to $249 for the upgrade decode board and the drive," said Jeff Moesher, Micron's vice president of desktop products.
The drop represents about a $150 decrease on the price of the drive and decoder.
When the company launched DVD in June (see MMW, June 23, p.1) it was standard equipment on the Millennia XRU Fusion 3D and available as a bundle (with a sound card and other equipment) for $599 on a few models. Now a DVD drive and decoder board are available as an option on all Millennia models.
When asked why he thought Micron was having a lot of success with the PCs, given the limited amount of content, Moesher said he didn't know.
As a mail-order company, Micron caters to early adopters who want the latest technology regardless of how useful it is. This customer target could account for the DVD sales. PC manufacturers who sell through retail to less sophisticated buyers might not have as much success.
PC executives who spoke with MMW were not optimistic about the number of DVD-ROM titles (excluding ports of multi-disc CD-ROMs) they expect will be available for the holidays.
"I don't feel like we can speculate, but you can probably count them on two hands," said Jonathan Weech, platform manager for Micron's Millenia products group.
Brian Dalgetty, IBM Corp.'s [IBM] program director for consumer product marketing, said, "By Christmas there's probably going to be a handful, maybe two dozen titles," he said.
Meanwhile, DVD-Video software activity is on an upswing.
Warner Bros. and Toshiba America Consumer Products Inc. [TACP] will join forces to launch a $30 million marketing campaign in late Ocober. Philips Electronics Inc. is offering customers who buy the company's upcoming 420 AT DVD-Video player a choice of five free titles with the purchase.
Several software publishers who have spoken to MMW over the last few months have said consistently they will only develop new titles for DVD when there is a significant installed base of drives to justify the expense. Moreover, they will only port CD-ROM titles to DVD if PC makers foot the bill.
Limited Bundling Opportunities
The minimal amount of DVD software bundled with fall PC introductions suggests few hardware manufacturers are biting.
Compaq Computer Corp. [CPQ] is bundling only two titles with its DVD-enabled Presario models later this month: a Warner Bros. sampler disc and Warner Miller's Ski World from Multicom Inc.[MNST], said Scott Holder, Compaq's manager of desktop marketing
Brian Connors, IBM's vice president of consumer systems, said few titles were available to meet the company's shipping schedule. As a result, IBM is not bundling any titles with the DVD PCs being announced Sept. 15. IBM is trying to get the DVD-ROM version of Activision Inc.s' [ATVI] Spycraft bundled on PCs for additional DVD later in the fourth quarter.
Micron's Weech hopes to offer a soft bundle and include a certificate for a free DVD-ROM disc with the purchase of a DVD-enabled PC but said "that's a ways off." (IBM, 914/766-3419; Micron, 208/893-4425; Compaq, 281/514-0484.) |
