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DVD Industry Insider Report - The Press vs. Reality

by The DVD Insider January 25, 2005

If you read the press it is obvious that CD is long dead, DVD is rapidly dying and the consumer can't wait for Blue-ray technology to arrive. Unfortunately, no one has convinced the people who buy the stuff that they want to change or that they are even as far along as writers lead us to believe.

While the HD and BD camps loudly exclaim the technology is here and their approach has won, industry analysts (usually very optimistic) estimate that Blue technology won't have much of an impact in the next four years. In fact, for the next eight years DVD burners and recorders will remain the product most people buy. According to IDC they estimate that Blue burners won't even be 10% of DVD burner sales by 2012.

So why is DVD still so popular and selling so well?

[Figure2] First of all, we realize Silicon Valley isn't the Midwest or even the Deep South. Most people haven't figured out that they have to have a DVD burner on their computer and a DVD recorder on top of their TV (yes, the analog set). The prices of both have fallen so rapidly ($50 for a burner, under $200 for a recorder - and analysts project they will go even lower ) that people buy them just because they can, not because they have a "must have" application or use.

As we've said before, DVD viewing (according to mainstream movie, video and TV viewers) is pretty darn good. Those who have seen HD say it is better - but so much better that they are willing to make the big investment? Not really. Most will buy HD ready sets and then wait and see. Common logic says we'll slowly slide into the next generation technology rather than jump.

Of course there are some interesting technologies on the horizon - like perpendicular and holographic recording - that may replace Blue technology even before it arrives. Between now and then DVD burners and recorders have reached the point of commodity pricing since all of the manufacturers have access to the DVD intellectual property and all of them have stepped up to 16X and DL writing.

As for the Plus or Dash issue... most people don't know and don't care. The key is the quality of the media you use and how you take care of the media.

Granted, there is a lot of momentum behind the Blue technologies - but most of it is coming from the manufacturers... not consumers. People are price sensitive (ok, cheap ). They aren't going to throw out "good enough" video for "better" video. We all realize that content is king, so both camps - HD and BD - are working hard to get the Hollywood studios in their corner.

But Hollywood still looks at the numbers. What they see is millions of inexpensive DVD players flying out of stores and tens of millions of movie DVDs being rented, sold and played on the 127 million players that have been sold since DVD was introduced. The studios may sign up with one team or the other, but they will continue to have replicators use their DVD printing presses to knock our their feature-enhanced DVDs that cost them very little and reap big profits around the globe - usually more than they make from the theater showings. In fact, according to DEG (Digital Entertainment Group), the industry racked up $21 billion in sales and rentals.

Does anyone believe Blue discs will hit those numbers in 2008?

DVD Industry Insider Report - Reliability and Standards

We can never understand how people can go to Fry's or BestBuy or CompUSA and be delighted with the fact that they bought a spindle of 50 discs for $15 and only half of them were bad. Guess their time isn't worth anything. Of course, if the half they successfully write to do go bad in a few weeks or months they will say obviously "all" DVD media is unreliable, not just the cheap stuff.

Then they also stuffed their DVDs in a CD jewel case and pulled them by grabbing the outer edges.

The leading respectable manufacturers are working with standards groups to develop some media rating standards so the consumer will have a way of judging good from bad or marginal media. What reputable manufacturers fully understand and marginal second and third tier media producers have to understand is that the reflective layer alone doesn't determine the reliability and data life of a disc.

[CrossSection2] Media - CD and DVD - is very complex to produce despite its low cost. Dyes, reflective layer, plastics, protective coating, flatness, stamper quality, spin processes, margins monitoring and the interaction/performance of all of these items have to be precise to produce a quality disc. The leading manufacturers have the experience, expertise and infrastructure in place that deliver that performance for the consumer. Second and third tier as well as no-name producers don't have that in place and it takes time to develop.

The key for the manufacturers and standards groups will be enforcing and policing the rating usage which is not a new issue that will have to be addressed. But according to Dr. Victor McCrary, Business Area Executive for Science and Technology at Johns Hopkins University, information preservation is - or should be - a major concern for businesses, governments and individuals. He points out that much of today's information - data, photos, images, video - begins and remains digital (Forrester Research estimates 90+% of our information falls into this category.

That's why responsible disc manufacturers and standards groups are working on the data life rating issue. People and organizations need to understand and appreciate the importance of protecting their data from loss…not just theft but hard drive crashes, cheap media degradation and other factors.

We believe that ultimately - and probably as a result of the losses of irreplaceable memories - people will come to realize that if a price seems too good to be true…it probably is. It's only because of the bitter experience of a hard drive loss that people become huge believers of backup and the same will probably hold true for the quality/price of media issue.

Regular quality DVD media, properly handled is pretty robust and reliable when handled according to the manufacturers' recommendations but several firms have taken the data protection issue one step further. They've added a unique coating that protects the content from dust and rough handling. Mitsubishi, Verbatim and several others note that their new hard coating is 40x more resistant to damage than standard discs. Best of all they don't dramatically increase the cost of the media as does one manufacturer that claims 100x more resilience at a major premium in price.

We've never lost CD or DVD content because we're careful with our discs. We handle them properly and we store them properly. But we do understand that some families have kids and spastic adults who could ruin the content in a heartbeat. So the 40x hard coating cost is probably worth the added content insurance. The 100x upcharge may be more insurance than most people want to buy but… we'll see.

DVD Industry Insider Report - Penalty for Interference?

Speaking of CDs, we came across an online blog where a "certified geek" said that his metallic CDs were causing interference in his wireless connectivity. We had never heard this one before and were skeptical -- these are the way wild statements become facts -- so we asked some of the wireless experts at Intel and Cisco. One of them even did a quick RF experiment in their antenna chamber just to check for himself.

None of these people had ever heard of CDs (or DVDs) causing a problem. The RF experimenter never encountered an issue. But they were all quick to add that it "might" be possible since any reflective surface (even rain) can affect some wireless transmissions.

Wireless networks at the office, on the road and at home are increasingly popular and extremely convenient for work and entertainment. Guess we'll just have to learn to work around the signal reflection/reduction issues whether they are natural or manmade because DVDs, WLAN and CDs are here to stay.

The Recent Surge in CD Usage

[Figure3] Why is there a big upsurge once again in CD use (production was up about 20% over last year)? It's all about music and photos.

While online music sales have gotten into the mainstream (as Apple has proven with their iPod and iTune sales), most people still like their music on... CDs! In fact, according to an IDC survey 43% want their discs.

Like the increasing number of people who use DVRs to capture and watch their TV shows when they want to watch them there is a growing number of people who want to produce their own disc mixes. At least that's what the download sites see as people pick their selections and order media at the same time.

Then there is the growing demand for printable media that seems to be increasing for two reasons. One, people simply don't like the look of a disc scribbled on with a Sharpie. Two, inkjet printers that write to discs have improved their quality while reducing their prices so much that they can almost be an impulse buy. Steve Baker of NPD, the retail sales monitoring leaders, notes that printable media and the multi-task printers have shown considerable growth over the past six months.

[Figure4] Digital camera sales and usage have not only stimulated CD sales but have encouraged Google to launch their free Picasa product. At the same time, leading software suppliers like NTI have introduced 9:1 products that handle video, photos, audio, slide shows and backup.

According to IDC, the number of digital images are not only increasing dramatically but the vast majority are never printed. There are indications that ad campaigns like AOL's lose your precious photos ad campaign and the new breed of do-it-all software will have a very positive impact on people moving their family and personal content onto disc for safe keeping. The best products automatically produce superb slide presentations and offer disc-spanning backup.

Once fear, uncertainty and doubt (FUD) set in, backup to DVD and CD might become a regular habit. That would allay a lot of Dr. McCrary's fears of lost digital data.