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To: DiViT who wrote (36275)	9/28/1998 12:59:00 PM
From: Stoctrash	Read Replies (2) \| Respond to of 50808

IRMA DVD FORECAST: The International Recording Media Association (IRMA) has released its "Optical Media Intelligence Report," which forecasts annual worldwide DVD replication of 1.28 billion disks by the year 2002, including all of DVD's formats (DVD-Video, DVD-ROM, DVD Audio, DVD-RAM, etc.). The numbers are part of a study on the growth and direction of the world optical media marketplace, which contains statistics on all current and emerging optical formats. According to IRMA Executive Vice President Charles Van Horn, "We are obviously in the audience-building stage of the DVD marketplace. Audiences are slow to change with the introduction of new technology. An educational process is always needed. Look at 2002 as only the beginning of the format's introduction to the consumer mass market." Even though it's only a "beginning," IRMA's statistics chart a rapid rise for DVD during the next four years as the format establishes a strong consumer niche for itself in video, ROM audio, and blank recordable applications. IRMA predicts that DVD-Video replication will increase from 40 million units in 1998 to 183 million units in North America by 2002, and from 64 million units this year to 430 million units worldwide by 2002. "Of course, DVD-Video is a rather small marketplace in comparison to VHS, but as the first true convergence entertainment product the potential, according to our statistics, is tremendous," Van Horn adds. IRMA predicts 800,000 DVD-Video households by the end of 1998 in North America, growing to 8.6 million households by the year 2002. The growth of retail outlets will also propel the demand for DVD-Video product, predicts the IRMA, which projects that the number of stores selling or renting the new format will increase from 5,000 outlets at the end of 1997 to more than 12,000 by the end of the year. "Sensible retailing and marketing will make DVD more apparent to all consumers -- not just early adopters -- who are acquiring DVD-Video programs at an annual rate exceeding VHS sell-through buy rates, of 15-20 DVD-Videos versus 10-15 VHS videos," adds Van Horn. He encourages the Hollywood community to "emphasize the entertainment content and potential of DVD and not confuse the consumer audience with a technology story. In order to build the audience for DVD we must develop new and innovative programming that truly communicates the value of the new DVD format to its audience." members.aol.com 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. Some 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," says 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 continues. 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.