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To: Don Dorsey who wrote (34805)	7/31/1998 10:45:00 AM
From: BillyG	Respond to of 50808

PolkVerity Study Reveals Consumer 'Wait and See' Attitude About Divx, DVD Purchase DETROIT, July 31 /PRNewswire/ -- In a recent study conducted by PolkVerity, the California-based research firm, consumers are confused and disgruntled about the consumer electronics industry's presentation of conflicting digital entertainment formats. So much so, that a high percentage of consumers indicate they will "wait and see" before purchasing either DVD or Divx-based technologies. The study, based on surveys of both owners and non-owners, was conducted to assess home entertainment patterns, including movie-viewing habits and rent versus own software preferences among consumers. It focused heavily on gauging consumer awareness and understanding of DVD and Divx, purchase likelihood of both, and consumer reaction to DVD and Divx being offered simultaneously in the marketplace. "We found that consumers are expressing resentment toward the consumer electronics industry," said Bill Matthies, PolkVerity senior vice president. "They feel strongly that a certain responsibility lies with the industry to present the best product option without creating confusion. In other words, they are unhappy about the introduction of the DVD-Divx competing formats." According to Matthies, consumer sentiment is reminiscent of what occurred when VHS and Beta formats fought it out for marketplace dominance. "Having been through that in the not-too-distant past, consumers are not eager to deal with the uncertainty, buying trials and ultimately the risk that they've made the wrong choice in new home entertainment technology." More than half of those surveyed (54%) agree that they would be upset to learn that the industry had produced competing DVD formats and that some software will only be compatible with one of those formats. Furthermore, less than half (44%) agree that having two different DVD formats available on the market would make them less likely to purchase either format. PolkVerity says these responses demonstrate two potentially damaging consumer attitudes. First, as consumers learn more about DVD and Divx, they may form anger towards the consumer electronics industry. "Apparently consumers have a measure of trust that the industry will research and present the best product options to them," said Matthies. "In other words, they are expecting the industry to make things easier for them, rather than more confusing. When competing formats are introduced and the situation becomes more complicated, it is inevitable that consumers will ultimately blame the CE industry and specific manufacturers." The other damaging attitude is evident when nearly half of the respondents say differing DVD formats will make them less likely to purchase either. "It is likely that when choosing a product becomes more complicated for consumers, many will choose not to buy it at all, rather than make the effort to research the best option for their own personal use," Matthies continued. If the specter of a confused consumer and a wait-and-see attitude isn't enough, DVD owners surveyed were quite vocal in their dislike for Divx. Most are "early adopters" and it is likely that their friends and family will come to them for advice regarding competing products available. Therefore, DVD owners may do damage to Divx upon its release. Consumers are also concerned about the impact of Divx on their privacy and the environment. One-third (34%) say the Divx billing process through phone lines infringes on their right to privacy. Additionally, one-third believe not returning Divx discs would cause an environmental problem. Interest is further tempered when consumers were asked to consider potential drawbacks. Although initial interest in Divx may be nearly as high as interest in standard DVD, it is possible consumers will uncover concerns as they learn more about Divx technology. DVD rental availability is proving crucial to the success of DVD players. Although most owners buy DVD discs rather than rent, it is likely due to their low opinion of the quantity and quality of DVD software available for rent. The popularity of renting and the "rent and return" habit cultivated by most consumers through their use of VHS video tapes, does not appear to be a deterrent to DVD. Even non-DVD owners have expressed a definitive preference for renting tapes and discs over buying. So, if DVD is going to succeed with the general public, rental software must be plentiful. Without a wide selection of movies to rent, consumers may still rely on their VCR or become dissatisfied with their DVD purchase. The ability to record also presents an issue. While video tape recording is not as frequent as movie-viewing, more than half (51%) of consumers make recordings more than once a month. Although this will not likely be a "make or break" feature for DVD players, it is evident that many consumers would enjoy this convenience in the DVD format. More............ newsalert.com