Industrial Management: Consumer Electronics
DVD Players: Don't Toss That VCR Yet
For playback only, they're cheap, but recording is another story
Since its launch three years ago, the digital video disk has seen its popularity explode like no consumer-electronics product since the compact disk. Prices on players have plummeted to under $200 in the U.S., prompting Americans to buy more than 4 million of them in 1999. The takeoff in Japan has been slower: Only half a million systems were sold last year. But with recordable DVD players just popping up in Japanese stores, interest in the format is rising.
Is it time to get rid of your videocassette machine? Better wait a few more years. Some of the same companies that created the original DVD are now locked in a struggle over how to build recordable versions--both for high-fidelity music and for video. Spooked by recent hacker attacks on DVD copy protection, music companies and film studios are looking at DVD with fresh skepticism. Meanwhile, prices are falling on multigigabyte hard-disk drives for both personal computers and PC appliances from companies such as TiVo Inc. and Replay Networks Inc., which could replace VCRs. DVDs will have trouble keeping up on cost and storage capacity, says Van Baker of Gartner Group.
Pioneer was the first out the door with a DVD recorder. Launched in December, the player was priced at just above $2,000, with 4.7-gigabyte blank disks selling for about $30 each. The company is cranking out only 10,000 units a month. Other Japanese consumer-electronics giants, such as Toshiba and Matsushita, plan to release versions before the end of this year. But at current prices, the new gizmos won't steal much shelf space from other recorders. "We're not talking about the DVD replacing the VCR yet," says Masami Morishita, manager of Pioneer's video disk-recorder team.
The main advantage of the DVD recorder--compared with, say, a personal computer with a huge disk drive--is the ease with which TV programs and home movies can be accessed and edited. For each track you record, an identifying frame is displayed on the TV screen, like an index card. This makes it easy to cut and paste pieces into one track on the disk with a remote control. If your favorite singer, say, shows up in three different programs you've recorded, you can place all those performances side by side on one track.DURABLE. The disks have plenty of space. A blank DVD can hold a full-length film recorded in crystal-clear quality or as much as six hours at lower quality. TiVo and Replay can hold five times as much but aren't meant for permanent storage. "DVDs will be used to record things people want to keep for a long time," says Hiroshi Matsumoto, a DVD sales manager at Toshiba.
The film industry fell in love with DVDs as a way of distributing movies. Together, studios have released about 6,000 software titles in the U.S. But their attitude may have changed somewhat after a gang of programmers cracked the DVD-encryption scheme in December and posted their work on the Internet. The film industry has retaliated with lawsuits. If that fails, experts say, it might dampen studios' enthusiasm for DVD.
Even leaving intellectual property aside, however, there's likely to be a bruising format war over DVD recorders. Pioneer's version, called DVD-RW, is being produced by a group of companies that includes Sharp, Mitsubishi Electric, and South Korea's LG Electronics. A rival group, led by Toshiba and Matsushita Electric, has a format called DVD-RAM. Sony and Philips are working on yet another approach, called DVD+RW, which uses a different type of recording technology.
Even if all three approaches make it to market, the consumer won't be hurt, manufacturers say, since all three formats will play the same prerecorded disks. But when used in combination with personal computers, the differences could lead to glitches. In other words, DVD recorders have a few more years to spend in the luxury-toy category.By Sebastian Moffett in TokyoReturn to top