Manufacturers, retailers fine tune DVD Audio format - Brief Article

Discount Store News, April 3, 2000 by Robert Scally

DVD Audio will come to market later this year amid great expectations, as well as a bit of skepticism.

Unlike their reception for DVD Video, retailers are somewhat leery about the new DVD Audio format, especially since concerns over encryption technology delayed the original launch, which was scheduled for October 1999. Presently, the format is scheduled to come to market sometime in the third or fourth quarter. A number of other issues surrounding the format--namely, pricing and the dimensions of packaging for audio software--also remain unresolved.

But skepticism can't overshadow the much-touted benefits of the new format. DVD Audio offers multi-channel surround sound with a resolution greater than that of the current generation of audio CDs. The format also has the ability to include video, text and other multimedia content with the audio program.

Many leading retailers have been anxiously awaiting the roll-out of DVD Audio. "Our company has always been very proactive in looking at developing technologies," said John Thrasher, vp of video at Tower Records/Video/Books. Tower was a leader in the introduction of VHS, audio ODs and laserdisc, Thrasher pointed out.

DVD Audio will be merchandised alongside the existing audio CDs at Tower, Thrasher said.

Best Buy has also been on the forefront of several new consumer electronics products, most notably DVD Video. Best Buy is likely to get behind the new DVD Audio format as long as the pricing is right and the launch of the format is well supported by both the record labels and consumer electronics manufacturers.

"We'll support [all of the] the new formats that come out as long as the hardware and software rollouts are in combination," said John Michael, media manager of music, at Best Buy. "It really comes down to what the customer wants."

The way in which DVD Audio is launched will have a major impact on how the software is merchandised at Best Buy, Michael told DSN. If the industry is able to pull off a coordinated launch with the hardware and a significant amount of the software, then Best Buy will probably merchandise the hardware and software together, in much the same manner the DVD was initially marketed in the chain.

"If it's a scattered kind of launch then we'll probably put it with audio," Michael said.

The introduction of DVD Audio players could take place as soon as the end of June or early July, said Gene Kelsey, vp and general manager of audio for Panasonic Consumer Electronics.

"There probably couldn't be a consumer product launched without a couple of false starts," Kelsey said.

Panasonic is planning to introduce set-top players that will accommodate DVD Audio, DVD video and the current generation of audio CDs, Kelsey said. At the Consumer Electronics Show that took place in January, Panasonic also announced that it would also be introducing a line of DVD Audio car stereos.

"We're looking for different ways that we can take DVD Audio and incorporate it into other devices such as portable players such as mini shelf systems," Kelsey said.

Dedicated DVD Audio-only players probably won't be introduced for some time until the format is sufficiently established, Kelsey said.

The development of an effective copy protection system remains the one stumbling block to the introduction of the DYD Audio format, said Bill Allen, director of new media technologies for BMG Music Distribution.

"It would be irresponsible on our part to go with an encryption system that is [not protected]," Allen said, referring to an incident where a Norwegian teenager recently developed a way to defeat copy protection systems included on DVD Video software. "We're moving as quickly as possible to resolve this."

Allen acknowledged that the record industry does want a coordinated launch of DVD Audio software and hardware. A coordinated effort by the movie studios and CE manufacturers helped propel DVD Video to its current status as the most successful launch of a CE product in the history of the industry.

"Certainly we'd like to see the software introduction follow closely with the hardware introduction to gain momentum," Allen said.

Standardized packaging will be a must for DVD Audio's survival at retail. Unfortunately, packaging standards for DVD Audio have not yet been set, complicating retailer's plans.

"One of the problems we're having right now is that we don't know what direction it's going in terms of packaging," Best Buy's Michael said.

Retailers and the movie studios were able to get together and agree on a packaging standard for DVD, and Tower's Thrasher said that he hopes that the same thing will happen for DVD Audio.

Thrasher pointed out that if a DVD Audio launch is to happen in June or July, it doesn't give retailers much time to prepare, especially with issues like packaging left to resolve.

A packaging format that is somewhere in between that of DVD video and the current audio CD jewel box is the most likely choice for the new format, BMG's Allen said.