DVD moves slowly but surely

DVD moves slowly but surely

A lot of channel players and manufacturers might be preparing for a DVD onslaught but the reality of the situation is slightly behind the hype surrounding its uptake.

DVD is most certainly being touted as THE next-generation storage technology. However its current position in the market against the incumbent CD is not so cut and dried. Many commentators suggest DVD is still at the early adopter stage, in need of more software support and concentrated mostly on consumer electronics. DVD will also struggle in the short term to compete with CDs on price and speed.

"DVD-ROM has been slow to take off because of the lack of content. There are about 3000 movie titles and three games that really take advantage of DVD technology, encyclopedias and the phone book. But this is not compelling enough to attract users to buy a PC with a DVD-ROM drive," explained Mary Bourdon, an analyst at GartnerGroup.

According to Gordon Kerr, product manager of Sony Australia, piracy, consumer dislike of the security devices on the drives and slow uptake of the technology through the channel are other stumbling blocks to DVD's increased penetration.

Sony has in fact temporarily reduced its development efforts in the DVD space, choosing to discontinue its retail product, the 5x32 kit, instead waiting until the new generation product, the 8x drive is released in the first quarter of next year. The 8x is faster than previous versions and will have Region Encoded technology manufactured into the hardware to reduce piracy problems.

This piracy protection software is produced for four regions around the world and means software manufactured for Thailand cannot be played in Australia. Consequently, if a customer orders a US version of a game it cannot be played on hardware made for the Australian market. It's a feature customers don't like, said Kerr.

Kerr believes DVD-ROM sales are increasing, but insists the technology is still only focused on select market groups. At present, DVD ROM drives are purchased by gamers who like watching videos on their PCs and those who like games with video graphic and the top-end business client, Kerr added.

"Sales to OEMs double every three months. All PCs sold for Christmas will have a DVD-ROM drive. Once business is using the technology as a matter of course then the retail product for upgrades will follow," he said.

According to Peter Geer, computer buyer for Myer/Grace Brothers DVD presently resides mainly in top-end models as part of a package. He insists this alone will prompt users to be more aware of the technology, making it only a matter of time before DVD infiltrates the lower end of the market. "Every time a new format gets introduced you'll have early adopters who will then drive the take-up until it is a snowball affect and the price starts to drop and software is developed. The acceleration of interest shown in DVD is directly related to software availability," said Geer.

The Myer/Grace Brothers catalogue features Encarta available on CD or DVD, for the same price. "It will be either or for a while yet, but as demand increases, DVD will take over," suggested Geer.

According to Bourdon the DVD market is "going slowly as a storage device on PCs." GartnerGroup predicts that it will only be in 2003 that more DVD-ROMs will be shipped than CD-ROMs. Bourdon suggests that the market needs lower prices, software distribution and more game content to boost its claim against CD-ROMs.

Yet a lot of manufacturers are preparing for the transition to DVD now and resellers are advised to take up a similar strategy.

Hitachi Australia no longer even manufactures CD-ROM drives, except for outstanding OEM contracts and last week appointed a business developer manager IMM, Wilson Ho, to accelerate the growth of Hitachi's DVD-ROM, RAM, and Hard Disk Drives.

In line with this announcement, Digiland was selected as Hitachi's distributor for its DVD range of products, moving the manufacturer into the small and medium business space through Digiland's network of resellers.

Toshiba also recently released its combination CD-RW/DVD-ROM drive and Apple announced its support of DVD with Power Mac G4-specific products including DVD software.

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