"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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