NEWS

DVDs still scratching consumers' video itch
Exhibitors at electronics show tout discs' advantages

Tuesday, January 17, 2006
Peoria Journal Star / by Steve Tarter

PEORIA - Among all the bells and whistles displayed at the consumer electronics show earlier this month in Las Vegas, one star continues to burn brightly: the Digital Video Disc.

More than 1.6 billion DVDs were sold in North America last year, according to Los Angeles-based Digital Entertainment Group. That's a significant number considering it wasn't long ago that Video Home System tapes ruled the home entertainment market. DVD players and discs first became available in 1997. By 1999, Wal-Mart was selling them in its stores. By 2003, DVD rentals topped VHS tapes. There are a number of reasons why the DVD has flourished, said Sam Wagner, owner of Video ID, a Washington-based video production company. "The DVD allowed us to move into a realm where one size of video fit a lot of applications," Wagner said. The DVD format not only provided better picture quality but versatility, said Wagner, noting his firm began producing video projects using DVDs as soon as they became available in 1997. The picture quality of the DVD was a big improvement over video tape, plus the DVD provided the opportunity to make clean copies, a big advantage over tape, he said. Sound was also improved with the DVD, plus multiple languages could be placed on the audio of a single disc, an important benefit for one of Wagner's clients, Caterpillar Inc. "We did a kiosk project for Caterpillar using DVDs, which involved 44 video programs in 15 languages," he said.

The other advantage to DVD over videotape is the amount of material that can be stored on a single disc, said Wagner. "Instead of a passenger car, (the DVD) is a semitrailer," he said. One more selling point for the DVD is its durability. If scratched, it can be easily repaired. One of the exhibitors making that point at the Las Vegas electronics show was Disc-Go-Tech, a Canadian company.

Disc-Go-Tech sells a range of machines that repair DVDs, from commercial units selling for $60,000 to the Disc-Go-Pod machine that sells for $350, said President Mark Chaplin. While the company's primary customers are businesses such as video stores, Disc-Go-Tech wants to sell to the public, he said. "We see the consumer market as largely untapped," said Chaplin, adding he expects to have a disc-repair machine priced at $100 for sale in 2007. Convincing people to seek repairs in a throwaway society takes some education, said Chaplin. "But consumers have been finding us. They realize that for a fraction of the cost (of a new DVD), it can be repaired as good as new," he said. People who want to repair a DVD but don't want to invest in their own disc-repair machine might try a local video store for help, said Chaplin. "Mom-and-pop video operations often provide repair service to customers for $4 or $5 per disc," he said.

But there's one segment of the market that won't worry about repairs - people who paid just a dollar for a new DVD. The cut-rate category is called the value DVD, said Michael Omansky, CEO of Dunellen, N.J.-based Digiview, a company that exhibited in Las Vegas. Digiview value DVDs combine a low price, sharp packaging and a good product, he said. The company's budget DVDs include old movies starring John Wayne or Mickey Rooney along with decades-old TV hits like "The Andy Griffith Show" and "The Lone Ranger." Family films, collections of cartoons and old monster movies are all popular sellers, said Omansky. "We're in three locations at Wal-Mart - in the toy section, the seasonal section and by the cash register," he said. Drug stores, supermarkets and dollar stores also sell the dollar DVDs, said Omansky.

While value DVDs represent only a small percentage of the total DVD market, it's a growth segment, said Omansky, noting that Digiview will soon offer sports and Hispanic titles. "An older audience wants to see these movies. If it's priced low enough, it's a no-brainer," he said. Like every technology, the DVD is facing an upgrade but it's not clear yet what will take over the market. Two new generations of DVD players were displayed in Las Vegas. The Blu-ray technology group includes Sony, Samsung, Phillips and Dell while the HD-DVD format has support from Intel, Microsoft and Toshiba. While the licensing battles ensue, movie studios are expected to produce DVD films in both formats.