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Its future looks very sharp, but will DVD videoplayer replace your VCR?
By Steve Alexander / Minneapolis-St. Paul Star Tribune
There is a comic moment in the movie Twister when the heroine notices that her empty pickup truck has been blown away by a tornado. "Where's my truck?" she asks, and instantly it drops out of the sky.
Manufacturers and sellers of new DVD video players are hoping for similar instant gratification this holiday selling season. Having stirred up a whirlwind of publicity, they hope that cash will rain down from the sky.
But it remains to be seen how many consumers will embrace a technically superior $500 to $900 replacement for the $200 VCR.
DVD, an acronym for "digital video disk" or "digital versatile disk," uses a CD-ROM-sized disk to display films in stunning high-quality video and stereo sound. DVD's benefits are easiest to see and hear if consumers have a big-screen TV or a "home theater system."
DVD's main technical drawback is that it doesn't record as VCRs do. DVD units capable of recording appear to be at least three years in the future.
Hany Nada, a senior technology analyst at the Minneapolis brokerage of Piper Jaffray, says DVD is clearly superior to the VCR.
"It has a much cleaner, better-looking picture, more accurate sound reproduction and a more 'immersive' environment," he says.
DVD's picture and sound qualities come from a technique called "video compression," which squeezes up to 133 minutes of video and sound onto one side of a shiny disk. When the disk is played, the data is decompressed on the fly and displayed on the TV.
DVD picture and sound quality sometimes are compared to those of direct broadcast satellite transmissions, which also offer better-than-TV picture and sound through compression techniques. But Nada says DVD is better.
"DVD uses the same compression technology, but at a higher bit rate," the number of computer "bits" transferred to the TV per second, he says. "There is more information coming off the DVD player than comes off the direct broadcast satellite."
Besides near-theater-quality picture and sound, DVD allows consumers to "browse" through a video to watch favorite scenes. And, because DVD disks have large storage capacity, equal to 4.7 gigabytes of computer data per side, they have other capabilities not found in videotape.
For example, movies can be recorded with multiple soundtracks in different languages. They also can be recorded in multiple screen formats, such as full-screen or "letterbox," in which the uppermost and lowermost portions of the TV screen remain blank.
DVD technology also permits a feature called "parental lock," in which children can be prevented from watching certain scenes in a movie. As the capacity of DVD disks continues to increase, it will be feasible to record multiple versions of a film with different viewer ratings to accommodate varied consumer tastes.
But because DVD is new to the consumer market this year, no one expects it to replace the VCR overnight. The Consumer Electronics Manufacturers Association has projected sales of about 400,000 DVD video players nationwide this year, compared with 19.6 million VCRs. As a result, retailers are aiming their sales pitches at "early adopter" consumers who like new electronic gadgets so much they are willing to pay high prices for them. Mainstream consumers aren't expected to buy many DVD players until next year, after prices decline and the technology is more familiar.
Retailers are hoping DVD will be the next big consumer product.
As a business strategy, selling DVD disks is more attractive than selling videotapes because the profit margins are better, says Ed Goetz, president of Simitar Entertainment Inc., a Maple Plain, Minn.-based marketer of DVD disks and videotapes. While DVD development costs are higher than they are for videotape, those expenses will decline within a year, he predicts.
But while the growth potential of DVD is great, at least two obstacles could block its success:
A rival DVD video format to be introduced next year could make this year's DVD units obsolete by mid-1998. Fears of pending obsolescence might stall DVD video player sales this Christmas.
And the majority of U.S. consumers, accustomed to the quality and relatively low cost of VHS videotape, may not embrace DVD technology anytime soon. Because VCRs are in about 90 percent of U.S. homes, DVD industry experts say, it might take the better part of a decade for DVD to replace the VCR.
DIVX (digital video express), the rival format to DVD, appears to be an attempt by movie companies and one large retailer, Circuit City, to capture the video rental market now largely controlled by independent firms that buy a videocassette of a film once and rent it many times. Circuit City reportedly invested $130 million in companies developing the DIVX technology.
Unlike today's DVD disks, which can be bought for an average of $25 each and endlessly replayed, next year's DIVX disks would cost $5 to $7 but would be encoded with computer software that would render them inoperative after a short period, perhaps 48 hours. Consumers then could buy additional viewing of the disk through a DVIX player-to-telephone connection that would disable the encoding software temporarily.
The result: DIVX disks essentially would be movie rentals, but the rental revenue would go to the movie company that owns the film, not to a rental store. For an additional fee, consumers could gain the ability to view the DIVX disk an unlimited number of times, in effect converting a rental disk into a purchase.
Nada says DIVX represents nothing less than an effort to create a major economic shift in the film rental industry.
"The way it works now, a film company such as Warner or Disney sells a copy of a movie to a rental store for $100 to $200 a tape -- and that's all the movie company gets, even if the tape is rented many times," he says. "The DIVX standard is meant to push the rental stores out of business."
The problem for consumers is that DIVX disks cannot be viewed with the DVD players being sold this holiday season. If DIVX becomes the standard for DVD players, this year's DVD players will become instantly obsolete.
Whether DIVX will succeed or fall by the wayside is a matter of conjecture. Several movie companies, including Disney, have embraced DIVX but are hedging their bets by also producing standard DVD disks.
Ed Goetz, president of Simitar, predicts DIVX will be hurt by its late entry into the market and by a lack of support from most big DVD hardware retailers. "The retailers see DVIX as being a ploy on the part of Circuit City and Disney to eliminate the rental retailer," he says.
Tom O'Reilly, editor of DVD Report, a trade journal, says the fate of DIVX will depend on whether it reaches the market in mid-1998 as planned, whether it works properly and whether consumers become frustrated by the potentially complicated telephone link needed to buy additional movie viewing time.
"I think the odds are against DIVX," he says. "But even so, I would not risk spending my $500 on a DVD player right now."
Still, while no one knows the rate at which DVD will be adopted by consumers, proponents claim it will happen faster than the 10 years it took VCRs to gain widespread acceptance or the roughly seven years it took audio CDs to become widely used. They say the rate of technological change is accelerating and that as a result DVD will become a mainstream consumer product much faster.
Copyright 1997, The Detroit News
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