The new king of home entertainment - DVD - Cover Story

Post, Dec, 2003 by Matthew Armstrong

OUTLOOK 2004: "With the DVD business, I see things continuing to grow but prices will probably come down. Ultimately, the way they'll address the piracy issues is by lowering the price. You're seeing titles that are a year old sold for $6. Once you get in the range of a rental cost it doesn't make sense for people to spend the time to pirate the DVDs.

"I don't know if the economy is turning around as much as we are in a new economy. There's a completely new model that we've never had before and that's primarily due to the Internet, which has changed the business model for a lot of small companies and has resulted in harming a lot of the larger companies. I can't say the economy's coming back but it's strengthening in its new model. We will continue to see growth for those that have survived these last few years. The smaller leaner post companies are going to see more growth. The larger companies are like trains; they have a lot of momentum but just like a train it's hard for them to stop and change directions to follow the new trends."

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BILL KUPER

Founder, Digital Farm (www.digitalfarm.com), Seattle

STRENGTHS: "The strengths the medium brought to the table five years ago, great audio and video, are still there. But now it is nearly ubiquitous in the home and office, that's the key for producers. In that regard, DVD gets stronger every year.

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"The strong DVD business is going to continue because there's a lot of people that are just now realizing that DVD is the way to get their message out, whether that's corporate or industrial. There are still people doing VHS but they're all going to come around. The linear message is going away."

WEAKNESSES: "For a lot of people it's like a dub. So what we look for is more programming interactivity. The format itself is pretty limited from a programming standpoint. It has no hard drive, it has no RAM that keeps information after you eject the disk. So you have to be pretty clever with the authoring to make cool things happen."

OPPORTUNITIES: "The opportunities are there in which you can make it interactive. For Digital Farm we've found that DVD videogames have been hugely successful. That's been a big market and one that's only going to grow. The Scenelt games are extremely interactive and there is some high-level programming, so every time you stick the disc in it's a different experience, it randomizes without repeat.

"If you offer kids entertainment and you mix all that in with a little interactivity and some learning you get into the edu-tainment category, and parents are going to be all over that. If they can buy some entertainment that's not junk and they learn something along the way, hey hallelujah.

"The HD world will take a while to shake out. Even when the tools become available, that doesn't mean there's going to be many places where that can playback. So there's long way to go but it's definitely something to keep your eye on. I don't think that's going to happen in 2004."