If your looking for growth, look to the DVD disc manufacturers. In search of a killer app.................
digitaltheater.com
WAYS TO TAKE DVD TO NEXT LEVEL DISCUSSED -- IRMA
Date:17-Aug-99
VIDEO WEEK via NewsEdge Corporation : At DVD '99 Conference Aug. 4-5 in L.A. organized by International Recording Music Assn. (IRMA), Exec. Vp Charles Van Horn told us he sees "urgency" in getting marketers "to push DVD into a mass consumer marketplace" or "2nd phase" of growth.
"Let's face facts," he said. "Most of us are so busy keeping up with the demand for products that there has, frankly, been little time to focus on doing something absolutely amazing with DVD. Many DVD releases show only a modest amount of added-value content. We are focusing our current business model on dragging consumers away from their VCRs, rather than building an entirely new business."
"Forty percent of the U.S. population" has "no idea what a DVD is," he said. "And even worse," he said, participants in recent focus group "became hopelessly confused" trying to differentiate DVD, digital TV, HDTV. "It all became lost in a muddle of new technologies in a consumer's mind." Risk, he said, is that "current customer is in danger of disappearing if he or she sees DVD as nothing more than a movie machine that doesn't record."
Van Horn said that "while 1.3 million DVD players were shipped in the first half of 1999, 10.3 million VCRs, including TV/VCR combos, were shipped during the same time period, a 27% increase over 1998. For DVD to make its mark it must offer something quite different."
One of DVD's distinctions is as computer software product. But incompatibility problems are keeping DVD-ROM from reaching its potential, AIX Media Group Pres. Mark Waldrep said. He said compatibility problems exist in "50%" of computers, although others at conference downplayed concern.
Columbia TriStar Home Video Pres. Ben Feingold said DVD-ROM drives could be in 30 million homes in 2000, up from 12 million this year just in N. America. In Europe, he sees drives going to 16 million in 2000 from current 5 million -- "the significance of computers is there are not many 2-TV homes there. " DVD-ROM catapults DVD "beyond video" to "education, training and even navigation," he said.
But that very versatility is partly why compatibility issue is "so complex," InterActual Technologies Pres.-CEO Todd Collart said. " Gateway uses 4 decoders in 15 SKUs," he said to illustrate potential incompatibility problems. Various levels of incompatibility include decoder level, navigator management and audio, "the master of all video streams, " he said. There are "30 different decoders in 100 different types of computers," but companies such as his are hard at work on solving problems, which he said often are only matter of "tweaking." And upside is good - - he said "one in 5" consumers who bought New Line's Lost in Space DVD "were going online" with it through added-value feature of link to Internet.
"As Europe's growth indicates, worldwide DVD growth is burgeoning nearly everywhere," Feingold said. Two world spots with potential trouble are China, where there's piracy issue, and Latin America, with parallel imports problem. Feingold said Columbia TriStar is among studios refraining from adding Spanish language tracks to discs because of that problem.
With caveat that his views are his own, Feingold projected that in 12 years, "I expect video stores, theatrical and television companies will all complain, but we will likely see theatrical and home video day-and-date. The difference will be how much [the consumer is] willing to pay" to see new movie at home.
With DVD exploding past early adopter phase, next level of users will be " different folks" who are "taking different end benefits from technologies," Buena Vista Home Entertainment Senior Vp-Mktg. Robert Chapek said. He said new consumers "will pick up more because they get outtakes, comments, puzzles to play, links to Web sites for online chats," etc. Growth will allow studios "to sell more movies" thanks to more drives in notebook computers, planes with electrical outlets for notebooks, DVD-ROM as another channel to sell and promote more movies.
"It is not how well we can do but how well DVD is doing," said Emiel Petrone, DVD Video Group chmn. and exec. vp-Philips Entertainment Group. He put total DVD music and movie release count at 3,300 titles, with 3.5 million players expected in U.S. homes by year-end.
"DVD is giving new life to exhausted VHS catalogs," said Jeff Fink, pres.-sales & mktg., home video, Artisan Entertainment. "They became basically new titles in DVD with extra footage, behind-the-scenes, new concepts." John Powers, vp-worldwide DVD market development, Warner Home Video, said DVD is collectible medium and "you have to look to add additional content."
Michael Fidler, senior vp-home AV mktg., Sony Electronics, said obstacles that remain for launching DVD as mass market product include "the 1.4 million homes with home theater systems who have yet to embrace DVD" and " launching DVD rental, because only then will the consumer see it as a primary option." He said "we need music video singles, we need children's product, we need instructional video. We have only touched the surface."
Fidler also referred to "wrinkles" already ironed out in getting DVD to become mass market product, such as Divx. Divx Entertainment Exec. Vp Richard Sowa told us public's emotional response to Divx was because of confusion it caused. "Our awareness was very low, only 25% -- even from DVD purchasers," he said, and "75% of America couldn't tell you what Divx was." For those who could, "we were bad because we had a modem -- never mind that all the satellite TV sets work on a modem, all the Internet. "
[Copyright 1999, Warren Publishing] |
