DVD Will Shift The Entertainment Balance Of Power To The PC
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Nov. 5, 1997--Digital versatile disk (DVD) -- the well-publicized successor
to VHS tapes, compact discs (CD), and CD-ROMs -- will struggle in the video and music industries but be a major success
for the personal computer industry, according to a recent report from Forrester Research (NASDAQ:FORR). The report
concludes that PC manufacturers will rapidly embrace DVD, resulting in an installed base of 53 million DVD-equipped PCs
by 2002. The next five years will prove less favorable for the video and music industries' DVD efforts, however. In 2002, only
5.2% of households in the United States will own a DVD-Video player, while only 2% will have a DVD-Audio player. As a
result, Forrester believes that the PC will be transformed into a more viable consumer entertainment device. "DVD will
replace VHS tape, the CD, and CD-ROM. The question is when," contends Mark E. Hardie, senior analyst with Forrester's
Entertainment & Technology Strategies and author of the report. "For the video industry, the first three to five years of DVD
availability will be a low-volume disappointment. Lack of available titles, a high price tag, and the need to add expensive home
theater components will discourage consumers from purchasing a DVD-Video player that can't even record their favorite
shows. In 2002, 5 million players will be installed in the United States, a household penetration rate of only 5.2% (see Figure).
In comparison, 89% of U.S. households currently own a VCR." In the music industry, explains Hardie, plans to convert from
CD to DVD have been slowed by lack of agreement over DVD-Audio standards. Furthermore, Hardie points out, it will be
difficult to convince consumers that DVD offers any considerable advantages over CDs: "DVD-Audio will be a tough sell
because music on CD is already in digital format and already sounds great. DVD-Audio sales won't take off until recordable
DVD technology (known as DVD-RAM) becomes widely available in 1999 or 2000."
DVD-ROM's Success Means More Entertainment Clout For The PC
Forrester predicts that DVD will be most successful in the PC industry. "DVD-ROM is the logical next step," asserts Hardie.
"Game, edutainment, and reference titles will benefit from DVD's expanded audio and video capabilities, while immense
storage capacity will reduce today's cumbersome 4-disk titles to one DVD." Hardie also notes that DVD drives can play
existing CD-ROMs, so there's little reason for PC makers not to support the technology. "As DVD-ROM drives continue to
drop in price, they'll rapidly replace existing CD-ROM drives in new PCs." What will the rapid adoption of DVD-ROM
mean? In short, that DVD's entertainment capabilities will be inextricably linked to computers for the next two to four years.
"As business travelers enjoy full-length movies on their laptops and college students cue up DVD concert videos during study
breaks, consumers will increasingly accept the PC as a viable and unique entertainment alternative." The report, "DVD's New
Content Model," is part of Entertainment & Technology Strategies, a Forrester research service that analyzes the impact of
technology on consumer entertainment. Additional information may be obtained from Diane Reeves, Forrester Research, 1033
Massachusetts Avenue, Cambridge, MA 02138, 617/497-7090.
CONTACT: Forrester Research
Diane Reeves, 617/497-7090
press@forrester.com
www.forrester.com
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