DVD: Big in 2000? Small Chance!

by John Boyd

DVD (digital versatile disk) is the next-generation optical storage technology that can play back movies on a TV or PC at a picture quality better than the laser disk. Yet despite the hype at its 1996 launch, DVD has not yet captured user interest. In fact, so poor have been sales of DVD-equipped PCs that, when asked about the issue, Yoshi Takayama, a senior executive in NEC's PC operations, snorts, "They just haven't sold!"

What's more, he doesn't hold out much hope that they will sell well in the foreseeable future. Takayama believes that DVD will have to wait for the rewritable version -- DVD-RAM -- before it takes off big in the PC market.

The hardware prerequiste
So, is Nishimuro simply closing his eyes to reality and making a wish? He says there's a lot more to it than merely keeping his fingers and Toshibas crossed. Nishimuro reasons that, given there will be a stack of DVD software available by 2000, and that DVD-ROM drives can also play CD-ROM discs, PC users will appreciate the difference by then and be ready to junk their single-media CD-ROM drives.

That sounds plausible. But for this scenario to pan out, a couple of important steps must first be completed: The prices of DVD-ROM drives are going to have to fall steeply, and the industry is going to have to get serious about creating some compelling DVD software to grab users' interest.

The hardware prerequisite looks the easier of the two to fulfill. Currently, DVD-ROM drives require a special DVD plug-in card to compress and manage the video, which adds considerably to the price. But as Toshiba engineers are quick to point out, PCs in 2000 will be driven by much more powerful microprocessors that will incorporate more multimedia functions than today's chips. At the same time, PCs could carry as standard additional multimedia chips, perhaps even an MPEG2 decoder (the video compression technology that makes it possible to squeeze a two-hour movie onto a single side of a 4.7GB DVD disk, with room to spare). Toshiba thinks it will be able to sell DVD systems to PC vendors for around \15,000 in 2000. Currently, 24X-speed CD-ROM drives are OEMing for less than \10,000, and retailing for double that. If Toshiba and PC vendors can indeed get the DVD-ROM drive market price down to less than \40,000, then the price difference may indeed be small enough to attract attention.

Still, I'm told on good authority you can find first-generation DVD drives in Akihabara for that price today. They're not selling, though, because there's no enticing software to play on them. After all, how many of us really want to watch movies on 15-inch displays? Very few, I suspect.

The software conundrum
And it's here where Nishimuro is less convincing. He talks vaguely about "new kinds" of software coming to the rescue, pointing to Microsoft's Encarta as an example. Certainly, electronic encyclopedias and DVD appear made for each other, but today's feeble contents are still far too text-oriented. If Britannica doesn't want Microsoft to rule our minds in the next century, then it better have a multimedia development program underway that will soak up every single bit of the 8.6GB available on a double-sided DVD disk. Such a project would add much more sound and more images, as well as speeches and video clips, of the actual subjects covered. But DVD needs more than a good multimedia encyclopedia to jump start the market. Let's face it, even CD-ROM has failed to live up to its 650MB promise when it comes to "edutainment." Myst, Quake, and the Corbis series aside, I have to scratch my head to think of other enticing titles.

It is as a distribution media that CD-ROM has been most successful. You must have a CD-ROM drive today, not for "edutainment," but because it's the medium for distributing applications. This is because it costs software vendors just \60 a pop to have their programs stamped out on CD-ROM. By comparison, preparing a DVD-ROM currently costs vendors around \600.

Sure, the price of DVD will edge down as sales inch up. But with the bonding process that's required to join what are two separate disks, DVD is just not going to compete on price with CD-ROM as a distribution medium. And given that software vendors use on average only 100MB of a CD-ROM's capacity today, where does that leave DVD?

About five to seven years from becoming the storage standard.

Betting readers harboring other opinions can gamble on letting John know their thoughts by fail mail: boyd@gol.com.

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