O.T.
Dave
Pioneer unleashes DVD recorder
November 29 ,1999
Company first out of gate in high-stakes race to control new market
HIROSHI HARADA and TORU SUGAWARA
Staff writers
Pioneer Corp. President Kaneo Ito had been waiting more than a year to release one of the most anxiously anticipated consumer devices of the decade. Last week, he got his wish. In front of a packed house in Tokyo's Hibiya district, Ito unveiled the first digital-versatile-disc device capable of recording disks that can be played on any DVD player.
The achievement by Pioneer, a medium-level player in Japan's audiovisual industry, is an industry coup. Its recorder goes on sale on Dec. 3. Ito likened his product to the laser-disc players that gave Pioneer its highest-ever sales in its late 1980s heyday.
"We have finally brought the DVD-recording function to market. We have achieved something that could not be done with the laser disc," said Ito at the Nov. 25 introduction. He emphasized the singular importance of the DVD recorder by associating it with the approach of the new century. Indeed, a standard DVD-recording capability promises broader application than even the arrival of the videocassette recorder decades ago.
Pioneer's innovation holds the potential of propelling the company into the center stage due to advantages it boasts over existing equipment.
The DVR-1000, at a list price of 250,000 yen ($2,400), is not subject to the rewinding, fast forwarding, or cueing requirements of legacy tape-based media. Random-access indexing of recorded material allows instantaneous playback or recording. As a digital format, it provides long-term archiving and duplication with no loss of quality. Equipped with built-in cable- and satellite-television tuners, it can record up to six hours of full-motion video with sound on a single disc.
The Pioneer-developed DVD-RW discs for recording list at 3,000 yen and have a rewritable capacity of 4.7 gigabytes. Video images and sounds recorded on the discs are secure against deterioration. The discs can be erased and re-recorded as many as a thousand times over their entire surface or in divided partitions.
DVD-RW could steamroll over the two nonstandard recording systems: DVD-RAM and DVD+RW. DVD-RAM uses an optical disc with the same physical dimensions as standard a DVD but the disc is enclosed within a protective cassette that renders it incompatible with regular DVD video players. DVD-RAM, a creation of Matsushita Electric Industrial Co. that is also backed by Toshiba Corp. and Hitachi Ltd., is the system of choice for early adopters in the computer field who wanted the multigigabyte storage capacity of DVD without waiting for the industry to settle on a recording protocol compatible with DVD video players.
The DVD+RW protocol under development by Sony Corp. and supported by Royal Philips Electronics, Ricoh Co., Hewlett-Packard Co. and Yamaha Corp., is unplayable in the installed base of millions of DVD players now used for audio-visual playback. Unless these nonstandard rival formats can offer greatly increased capacity or other features, their future is in peril.
Full throttle
Pioneer's full-throttle enthusiasm was amply demonstrated by the fact that it announced the DVR-1000 just six days after the Nov. 19 approval of its format by the DVD Forum, Japan's industrywide standards body.
Pioneer has had plenty of time to prepare. It finalized its DVD-RW format over a year ago, and in mid-September it showed a prototype of its DVD recorder at a conference of about 50 major retail store owners in Sapporo. The reception was positive. Masaru Saotome, executive vice president of Home Entertainment Co., a sales arm of Pioneer, said, "We aim to sell our DVD recorder in the DVD, VCR and camera sections of consumer electronics."
Pioneer's strategy of getting into the game ahead of the major manufacturers is reminiscent of its storming onto the market with its laser-disc players in 1981, making them the driving force of its rapid growth. That strategy culminated in Pioneer posting a record net group profit of 34.3 billion yen in the year ended March 1991.
That Pioneer is the company which succeeded in cracking the DVD-recording puzzle is a kind of poetic justice. The company in the 1980s failed to follow up on its popularization of the laser disc with a laser-disc recorder for consumers. Ever since sales of laser-disc karaoke systems, its top breadwinner, evaporated on the advent of telecommunications karaoke in the mid-1990s, Pioneer has been searching for a follow-up to its LD players. DVD-RW is its answer.
Industry watchers say Pioneer is staking its fate on its new product. Executive Vice President Masao Sugimoto explained: "Pioneer is second to none when it comes to its attachment to optical discs." In fact, it remains unchallenged to this day in the laser disc business.
Pioneer's DVD-RW protocol has so far been adopted by Sharp Corp. and Kenwood Corp., but has yet to become an electric-machinery industry standard.
Matsushita Electric Industrial, Toshiba and Hitachi are aggressively defending their DVD-RAM system, announcing in late September that they had developed a household DVD recorder based on the technology. DVD-RAM is, by default, also the only DVD-recording system so far implemented in data-recording devices for personal computers. Sony is working to develop its DVD+RW protocol for personal computers. "Sony has know-how to translate its technology into a DVD recorder any time," a Sony executive said.
The stakes are high. Including recorder units, worldwide sales of DVD players, which totaled 2.5 million units last year, are expected to top 10 million in 2000 and 15 million by 2002, according to the DVD Forum. Pioneer is predicting it will ship 150,000 to 200,000 of its new DVD recorders in 2000. In industrywide terms, that figure is small, but Pioneer's Sugimoto said that "with the decline in DVD-player prices, it is absolutely necessary to equip DVD players with a recording function to raise profits."
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