DVD TOMORROW: A PROGNOSIS by Peter M. Bracke

A Format On The Brink

By all accounts, things have never looked better for DVD. So many of the stumbling blocks that had peppered the path of success for the format (and were so kindly ampllified by a largely negative press) have been overcome. All the major studio holdouts have joined the format, with the exception of DreamWorks (although they are expected to join soon). Steven Spielberg , who previously had been holding his titles off of the format, has given DVD a strong jolt recently by allowing his first titles to be released. Consumer reaction has been very encouraging, with hardware and software sales setting records for a new format. And DIVX, who only a year ago were crowing that they would usher in a whole new paradigm for home video, are finding that accomplishment far, far more difficult than even they may have anticipated. To top it off, the mainstream press has made a bit of a turnaround in recent weeks, with glowing reviews and recommendations flowing forth from major publications such as Billboard, Entertainment Weekly and many other major news outlets.

So although there are still bumps in the road, namely the Recordable DVD format mess, the major bugs and snafus in the nascent DVD-ROM format, and the unknown factor of DVD-Audio, DVD still looks like it is on the road to major success. After deciding to prepare an article on the state of DVD as it enters what is largely considered to be "Phase II" of its introduction (i.e., the point when a format moves beyond the early-adopter phase) The DVD File had the opportunity to conduct a few informal and revealing discussion with many of the major players of DVD. Although the present and future certainly look bright for DVD, it is important to note that DVD is now poised to move into a new area never before explored by any video formats past or present. With this exploration will come changes, but not all the changes that result from a newfound mainstream success are necessarily going to be positive or welcomed, especially by the current consumer segment that has already embraced DVD. Some thoughts on the place DVD holds today, and where it might go tomorrow, are the focus of this article.

A New Paradigm

When DVD was first introduced, it was poised as a sell-through product largely intended to eventually replace the VCR and usher in a new era where sales would drive a video format, and not rentals. As we know, Warner and Toshiba, as well as Sony and Columbia Tri-Star, were the main proponents of the format. Although most didn't pay attention to this fact, Warner had and still is concurrently and aggressively positioning Video-On-Demand (VOD) as a delivery means to coexist with DVD. For those unfamiliar with the technology, VOD allows for true home rental, similar to pay-per-view, where you can literally order up a film any time you want, for a rental charge of around $4.00. Unlike PPV, though, you are not confined to a specific start time. You literally can order a film at the push of a button from right off the couch. This is interesting, because this future home video structure would have DVD for purchasing, collecting and recording, and VOD for renting. Although much talk has been made of DIVX and the end of the rental business, this new digital paradigm (which would be watched via DTV, by the way) doesn't seem to leave much room for the video store either, does it?

In any case, the death of rental was greatly exaggerated. Prod on by consumer demand, we have seen the DVD consortium have to switch gears over the last year and aggressively promote DVD rental. The major rental chains such as Blockbuster and Tower have finally committed to nationwide DVD rentals, as have smaller "mom & pop" outlets, many of whom supported DVD rental all along. DVD sales at high-end and Internet retailers have always been solid, but now major pushes by mainstream consumer retailers are underway, such as from Sears and Musicland, who both just announced partnerships with Sony and Warner for major DVD promotions this Christmas.

The end result of all this is that DVD is now, today, moving beyond the early adopter phase. It is important to note that prior growth models for new formats have shown that after the early adopters, you get three mainstream acceptance phases: Early Mainstream, General Mainstream, and Late Mainstream. The three mainstream acceptance phases are pretty self explanatory. The early mainstream is usually younger and more technologically-saavy, and lead the way for the general mainstream to follow suit. It has worked this way for the Cable, the VCR, CDs and now DVD. The late mainstream segment are the wariest, but once the general mainstream buys in, it is only a matter of time until all the barriers of resistance fall. (Editor's note: There are also the latecomers, which are those who take ten years to pick anything up. Usually these are our grandparents, who are just now buying a CD player!).

But, boring academics aside, what does this all mean? Putting into context, we have quite simply never had a product like DVD move into the mainstream. Remember that there was always a very hard division between laserdisc and VHS. Laser was expensive and bulky, and clearly aimed at the collector and film buff who would pay $100 for a single title, wanted extensive extras and insisted on widescreen. They were not so concerned with renting. VHS was, of course, the opposite. You picked up a flick for the weekend, and maybe you bought a movie or two if you really loved it once it became available for "sell-through_ (i.e.,priced cheap enough at around $15 to buy it). The VHS and laserdisc market division was for years easy, clear and well-defined. The two twang never met.

But now we have DVD, which is poised to not only bridge the consumer gap between these two paradigms, but usher in a new wave of "convergence" between television and the personal computer, as well as a new global marketplace where DVD will contain features that cross geographical and language barriers. Finally, all these new products will also all be digital, and the acceptance of them will signal the start of the first true "digital age." Simply put, quite a lot for a new format to take on!

Since you are reading this article, and I am writing it, we probably all believe in the same thing: that this is indeed possible and DVD can do it. But, in talking with many major DVD players for this article, there are definite signs that not everyone shares this same goals.

Lack Of A Shared Vision

Idealists, like this author, feel that DVD has the potential to illustrate to average consumers, who don't know a line doubler from a component input, have no idea what a commentary track is, and usually hate widescreen, the joys of quality presentation that laserdisc collectors and film buffs have enjoyed for years. DVD is finally "it," it being a product that can not only cross economic, class and educational barriers, but bridge them together. DVD is low-cost format that can deliver high-quality laserdisc image, sound and features in either widescreen or pan&scan, on a 4:3 or 16x9 digital television or computer, and can be used globally. As we all know, the potential is there. So why aren't the studios utilizing it?

Let's start with aspect ratios. A good example is MGM, who recently began eliminating dual P&S and widescreen versions from many of their catalog titles. Talking informally with them, they feel, as do some other studios, that market research shows consumers either want widescreen or P&S, not both. They make a clear distinction when making production decisions that it is best to serve one or the other market. Take the recent controversial P&S-only release of Chitty Chitty Bang Bang. MGM is reissuing the title on tape as well, with a large family-oriented promotion for both. Their research shows that the vast majority of their audience for "children's titles" decidedly prefer P&S. Remember, these are mainstream consumers we are talking about. MGM takes those little reader service cards found in every one of their DVDs very seriously. And this market research speaks volumes. Another recent survey they conducted for the Tomorrow Never Dies special edition found that even James Bond fans, when asked, wanted P&S only for the tape version (though the DVD will go out widescreen-only). This is very telling, and the major bone of contention DVD will face as it expands in the mainstream: widescreen is still favored by film buffs and laserdisc collectors only. The "average" consumer still despises it for the most part.

Talking further with MGM, it is clear that they are simply following consumer desire, and giving the people what they want. If the DVD market begins to demand P&S over widescreen, they will answer those demands. From a business end, this makes perfect sense. But, you may be asking yourself, why not just put P&S and Widescreen on every release? Simple: time, space and money. There, of course, is not always space to fit two versions of a long film on a single DVD (with current technology), so a decision often has to be made between P&S and letterbox. The greatest issue, of course, is money. To make a new 16x9 transfer, retelecine it and then make a P&S and widescreen version can run over $100,000. Also remember that at retail cost of $24.95, the studio actually gets, on the low end, only about $10 per copy of every one of those sales. So, for a $100,000 title, a studio would have to sell 10,000 copies just to break even. Most catalog DVDs do not sell that many copies. This is why MGM has decided to forgo multiple versions and 16x9 on many catalog titles (both P&S and widescreen will still continue to appear on the "A" titles, though). So, when a decision has to be made on P&S or widescreen, the choice usually ends up being, "what aspect ratio will sell the most copies"? (Editor's Note: Sometimes, however, P&S is chosen for other reasons...the upcoming MGM release Kingpin was scheduled for widescreen, but the Farrelly Brothers, who directed it, requested it in Full Frame (It was shot Super 35). Also, William Friedkin preferred the full frame version of Sorcerer for the upcoming Universal DVD, and even wanted The Exorcist special edition to be 4:3, but Warner insisted it go out 16x9. These things happen.)

Other features are also susceptible to consumer demand. It is true that Columbia is currently "reconsidering the consumer value" of foreign language tracks and subtitles on their releases. All those extra features were great when DVD first appeared, but as the format makes mainstream progress, and further market research is conducted, how important really are all the "bells and whistles" to Joe Six Pack? Much was made of DVD becoming a global product, but Region Coding quickly answered that. Exportation of Region 1 titles to take of the slack for the paltry selection of titles has become a major problem....eliminating language tracks and subtitles would increase profits, but also potentially help curb exportation of titles that are more desirable with extra languages and subtitles. Make no mistake, studios rightly want to protect there product, and many reinterated to me that the global marketplace simply is not ready to handle worldwide-ready products. The old system can't be changed so easily, they say.

Then, of course, there is 16x9. Most new releases get a 16x9 transfer simply because a new master has to be made anyway, so you might as well do it 16x9. But, catalog titles are really hurt in this regard, as most studios (actually all of them are guilty of this) simply rehash old laserdisc transfers, add a menu, and call it DVD. Although this can still look good, as we know it just ain't the same as a real 16x9 DVD-ready transfer. But, it simply still is not cost-effective to remaster every title in 16x9 and 5.1. Many cried foul when 2001 was released non-anamorphic, but there are some factors that lead to that decision. First, Turner Home Entertainment owns the transfer, and MGM was bound to their decisions. More discouraging, though, is that the 2001 transfer used cost over $200,000, and quite simply they wanted to spread that cost over more than just the laserdisc. Some studios, quite simply, don't seem to get or agree that wasting the DVD format's image and sound potential by not taking the time and money for 16x9 and 5.1 is often worse than not releasing a DVD at all. The general thought is "no one has 16x9 televisions, so 4:3 is the way to go." There is also the continued fear that 16x9 is "too good," and that the lack of copy protection on 16x9 DTV's makes it "unsuitable" (in one studio rep's words) to release product geared for DTV sets. And, strikingly, some studios fear that if they start offering or allowing some of their subsidiaries to release 16x9 transfers, they will have to produce all their transfers that way. If you offer the highest quality, consumers will begin to expect that as standard on all releases. (Hint: Buena Vista DVDs are a product of these lines of thinking.)

There is also the area of pricing. As talked about in a previous article here, DVD Pricing: A Short Primer, some studios are not pleased with a sell-through market exclusively, and are testing the waters with some higher-priced movie-only editions to see if the DVD market will support a rental window (i.e., a length of time where a title will cost more during the initial rental activity, and then be repriced to own at a later date, usually six months after release). As DVD is still primarily early adopters who aggressively buy in addition to rent, the majority of them balked at prices such as $34.95 for Fox's Home Alone 3 or $39.95 for Buena Vista's upcoming Beauty & The Beast Enchanted Christmas. These are not high-priced titles designed to milk money out of consumers, but more to test the rental market waters. There is some validity to this, because if DVD replaced VHS, and everything was priced $24.95 or less, the state of the video industry would revert back to the early VHS days before rental pricing, thereby costing the studios billions in lost rental revenue. Needless to say, many studios do not want to see that happen.

Lastly, there is the great fear that as DVD goes mainstream, the whole concept of low-priced special editions will disappear. Like VHS today, you may simply see separate releases of a P&S movie-only edition, and a high-price widescreen special edition for the collector. Two separate studios explained that they "were not at the point of separate releases yet." If this comment seems discomforting, it should, as it implies that if the format goes mainstream, it will stop being considered a convergence product and simply begin to mirror the current VHS/Laserdisc dynamic. Quite simply, the DVD market right now is mostly collectors, and the studios know they have to add extras to sell the product...as we have seen with the low-priced, feature-laden new DVDs of Sphere and US Marshals from Warner. Even these mid-level titles can sell consistently if you package and present them properly (even if some would argue they don't deserve such prestige treatment). And as reported, Buena Vista has negotiated with Criterion for possible special edition DVDs of their titles, therby creaing a situation where you recreate the VHS/laserdisc market structure and have separate "mainstream consumer" releases and high-end "collector's" releases.

This site feels that there is some truth to the accusations against Buena Vista and Fox, after some discussions with them, that they are intentionally holding off on features to intentionally recreate a VHS-like environment of movie-only titles and special edition titles. This is subjective, but it is clear that various studios, via their releases, have made a clear distinction between DVD as a true convergence medium with low-cost, high feature titles designed to have broad appeal to both the mainstream and collectors markets, and those that are high-cost, low features and are designed to keep those two markets separate. Even stalwarts such as Warner have lessened their commitment to convergence, as their controversial budget line of titles have forgone all extras, widescreen and 5.1 in favor of cost. Unfortunately, what market they think they are serving with this has not been explained.

The Crux Of The Argument

As you are reading over this, you may be coming to the logical conclusion that what we are really talking about is DVD turning into a digital copy of the VHS/laserdisc market. That after using the early adopters to launch the product, the studios will simply turn DVD into a glossy version of the current VHS/Laserdisc paradigm, and all the convergence possibilities of the format will be lost. This article is not meant to be alarmist, but the stark reality is that this is very possible. All the studios have different opinions, and needless to say they don't all see eye to eye. Also, I will acknowledge the opposing opinion voiced by a few who say, "so what?." What if there are separate releases for the collector and the casual consumer, is that so terrible? So what if foreign language tracks disappear...consumers usually only watch one version anyway, right? Most people don't care about extras and widescreen, and DTV is years off from mainstream acceptance. And who wants to watch a film on a computer, anyway? Simply put, they may say, there are just basic differences between the two markets, and the VHS/Laserdisc dynamic simply makes logical sense.

So, given these opposing viewpoints, and to be blunt, the DVD format is a big mess. There is no standardization in packaging, features, price or distribution in place. Consumers putting down their hard-earned cash for a DVD player and some titles has no guarantee to at least a basic set of features or guidelines. So, what is the solution?

The Solution (Or, At Least Some Good Suggestions...)

It is the opinion of this site that the above opposing line of thinking is largely misplaced even if it is well-meaning. We feel that it grossly insults the "average" consumer's intelligence to say that if presented with a high-quality medium with a choice of P&S and widescreen, well-produced extras, DVD-ROM convergence features, 16x9 capability and foreign-language support that these average consumers will be still unimpressed and not appreciate the added value. This line of thinking is elitist and implies only "film buffs" are smart enough to appreciate high quality. This almost seems like sublte class warfare. It is the opinion of this site that the average consumer does not enjoy supplements, widescreen and superior quality simply because they have never been exposed to it. How many times have you seen the impressed faces of consumers who see a terrific interactive DVD for the first time? While no expert, I personally have witnessed over a hundred friends, classmates, family members and consumers who have begun to appreciate intensely all the supposedly unessential "bells and whistles" they never before had exposure to.

There is a notion in the study of postmodernism of how knowledge of the process behind a medium (such as film) will then alter your perception of that product. In other words, extras and supplements allow you to see a movie again and again, with each subsequent viewing gaining increased depth and understanding because you have receiving new information about its production. Through supplements and widescreen, DVD has the capacity to offer consumers a chance to see and re-see films they may have missed in theater in a whole new way superior to VHS. This can further the medium itself, and not simply regurgitate old VHS copies in shiny new coat of paint. If the DVD camp continues to separate the supposedly "opposed" VHS and laserdisc markets, they will be denying consumers the chance to experience a whole new understanding of the world, and show themselves to be truly conservative (in the bad sense) and shortsighted.

It is the opinion of this site that a major part of the responsibility to prevent this falls to The DVD Video Group to set and maintain a strict set of parameters for the format. For those unfamiliar with the organization, it is a members only unit of DVD hardware and software developers designed to steer the format to a robust consumer product. This site urges them to take an active leadership role in bringing together the various factions of the DVD community. If a hardware or software manufacturer is granted a license for the DVD patents and allowed to join the forum, should they not also have to abide by a least a few set standards of conduct? It is not out of line for an organization to set up a basic rule book for its members. The DVD Logo is more than just that, a logo. If DVD is being promoted as a format, including all its promised applications, the actual software better deliver on at least some of those claims. The DVD Video Group has claimed a leadership role. It has not fulfilled it at all. We urge them to start doing so now.

This site also feels that it is the responsibility of DVD hardware and software manufactures not to intentionally exploit consumers by holding back on quality and features with the intent purpose of simply reselling titles over and over again or to intentionally create divisions in the market. Not to single out a specific supplier, but Fox perfected this technique with their umpteenth Star Wars and Alien box sets and separate releases. Disney also has made it a practice of intentionally holding back on laserdisc and DVD releases until after the VHS release. They have reiterated that the "collector's market" and the mass consumer market have different needs and wants, and it is okay to force consumers to choose without ever giving them a real chance to experience a low-cost, feature-laden release in which to judge the reaction. A recent example is the movie-only DVD release of TRON, which had extensive supplements already available, but Buena Vista insisted on keeping consumers away from the opportunity to experience a special edition at anything but $100 prices. Also, all the studios who do not support day&date with VHS fail to mention that they also reap substantial profits in reselling the same title in various formats. This is not to say that all delays in DVD releases are intentional (special editions do take a long time to produce, problems happen, etc.), but wouldn't it be interesting to see a VHS title held back so it would street with the delayed DVD instead of the other way around? (Editor's Note: Don't hold your breath...)

Also, it is important that Region 1 content suppliers force themselves to realize that as we approach the 21st century, we are indeed becoming a global marketplace. Why should other territories outside of America be forced to sit with sub par product or wait interminably when there is no real reason for catalog titles to be region coded? Why should Canada, who is legally recognized as a bilingual country, be denied French soundtracks and subtitles? If Region 1 is really the US and Canada, it is the responsibility of Region 1 suppliers to serve all territories within that region equally if they are going to slap a Region 1 label on it. It is certainly ridiculous to think suppliers will change the global marketplace overnight, but perhaps DVD can signal the beginning of more respect for territories outside of the supposed center of the universe, The United States Of America. This site would like to see a studio take a chance, spend some extra money and produce an extensive DVD with 8 or more languages, and release it in all regions at the same time to see what happens. (Editor's Note: Again, don't hold your breath...)

This site also feels it is the responsibility of all studio suppliers to not abandoned the early adopters who created and ensured this formats success and suddenly drop them for the new "mainstream" audience. We all bought DVD players and were sold discs that usually contain P&S and widescreen, 16x9, extras and foreign language tracks (when possible). We feel it is the duty of DVD hardware and software suppliers to not suddenly dump this approach now that they have used the early adopters to launch the format. It is quite true that the actual DVD authoring is getting less and less expensive, and that after a widescreen authoring job is done, 75% of the authoring work for a subsequent P&S version is already done. The real cost in DVD is in new transfers and sound mixes, not the actually DVD production end. The DVD Video Group should force the industry as a whole to follow the lead of Sony, who have begun to make High-Definition archival transfers of their titles, which can then be downconverted for other formats. This then amortizes the cost of a single transfer over many different formats, as well as for eventual DTV broadcast sales and any new HD formats. This is forward thinking, and pays off in dividends. Even if copy protection is not in place for HD formats, you can still hold onto the archival master, and can continue to downconvert for other formats, including 16x9 DVDs.

Additionally, if DVD hardware and software manufacturers are going to market their product as here to stay, they better make deliver and offer a product that can properly and to its best potential work for all the applications it has promised. DVD is being promoted as being DVD-ROM and DTV friendly, and hardware manufacturers are touting the multiple aspect ratio and language features ad nauseum. If the software manufacturers are making money off hardware sales, they better deliver on those promises, or what right do they have to exploit hardware manufacturers claims and then not fulfill them? If DTV manufacturers are going to use DVD, 5.1 and 16x9 to illustrate their product, and then the consumer finds that there are no discs on the market supporting those features, whose responsibility is it to own up to false advertising?

Lastly, and perhaps most importantly, we, the consumers, have an obligation to make our voices heard through our dollars and our pens about what we want DVD to be. Don't simply toss out those reader reply cards or zip past the contact information supplied by so many great DVD sites on the web. Use them or lose them. And don't buy crap. It is hard to resist that great The Thing Special Edition disc because it isn't 16x9, but if sub par product sells, the studios simply don't have any incentive to bother with better.

End Thought

In the end, as I am a realist but not a cynic, most of these suggestions will probably not be fully implemented. But, in the immortal words of Dr. Frank-N-Furter, "Don't dream it, be it."

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