In the mid-1990s, Hollywood wasn’t yet sold on the DVD.
The homevid business had been built around renting clunky plastic videocassettes, and the idea of selling movies on shiny silver discs generated more skeptical questions than support. “Some studios were very invested in the VHS rental model, and they didn’t want to tinker with it,” recalls Richard Cohen, at the time MGM’s president of home entertainment. Warren Lieberfarb, the former Warner Home Video president who is regarded as the father of the DVD format, remembers doubters asking, “Who wants a playback-only DVD machine?” Others were convinced, Lieberfarb says, that “the DVD’s copy-protection security will be hacked and it will destroy the industry.” And when Fox, the last major studio to begin releasing movies on DVD, decided to put TV shows like “The Simpsons” and “The X-Files” on the discs, “everybody had a heart attack,” recalls Pat Wyatt, then-president of Fox Home Entertainment. Skeins on disc would surely hurt ratings and syndication revenues, many assumed. A decade after the DVD’s U.S. debut in the spring of 1997, the disc is the foundation of the entertainment business — and all the naysayers have vanished. Domestic DVD sales generated $16.6 billion last year, with rentals adding an additional $7.5 billion, according to the Digital Entertainment Group. Retailers like Wal-Mart and Target have gained in power as rental businesses such as Blockbuster and Movie Gallery have faded. Netflix has shipped more than a billion DVDs to its members, and the operators of automated kiosks that rent and sell DVDs expect their business could rake in $3 billion annually by 2009. The vision thing For many in the mid-1990s, the concept of putting movies on discs brought back memories of the failed LaserDisc format, which targeted money-is-no-object cinephiles. But at Warner Bros., Lieberfarb felt discs were the perfect answer to the threat posed by digital delivery systems such as cable and satellite, which offered a panoply of new channels. The need to control Blockbuster’s burgeoning market clout was also an issue. “Forty percent market share for Blockbuster and 12% for their next largest competitor meant a loss of control over pricing and other terms and conditions for the studios,” Lieberfarb says. Indeed, DVD offered a way for studios to exert more control — in fact, selling discs let them keep two-thirds of every dollar compared with only one-third for renting tapes. Of course, no good format gets launched in the homevid biz without a format war. In 1993, Warner and Toshiba were working together to develop data compression and storage technologies needed to put full-length feature films on 5-inch optical discs. The two companies invited Philips to help develop the so-called Super Density (SD) disc, since the gadget maker holds a number of key patents related to the audio CD. Philips, however, had other ideas, teaming with Sony — another company hugely vested in CD technology — to create the Multimedia Compact Disc (MMCD). The two sides would have marched headlong into debacle similar to VHS v. Beta. But Lieberfarb was able to do some notable consensus-building, first allying with key studio partners, including Universal, then gaining the support of the computer biz, which was looking for a format to replace the CD-ROM. By the fall of 1995, Lieberfarb had the backing he needed to forge a truce, and the two sides announced the Digital Versatile Disc (DVD) at Comdex that year. In 1997, the first DVD players hit store shelves in the U.S., listed at $799 and up. Warner released 30 titles, including “Twister,” priced at $25, comparable to VHS. Still, Disney, Fox and Paramount remained on the sidelines, concerned that DVD’s newly adopted copyright protection standards weren’t good enough — and perhaps loath to pay format royalties to Time Warner. Again, Lieberfarb stepped in to campaign for the format. Fox, the last holdout, came onboard when Lieberfarb convinced Time Warner officials to end a feud with Rupert Murdoch and carry his Fox News on TW’s cable systems. By 2002, about 80 million DVD players had been sold, making it the fastest-adopted consumer electronics device ever. By June 2003, DVD rentals had surpassed VHS rentals for the first time, and players could be had for about $100. “I was very optimistic about DVD, but what actually happened was 10 times better than what I had forecast,” says Cohen, who now heads TNR Entertainment, a Houston-based DVD kiosk company. As the home entertainment industry shifted from renting programming to selling it, new power players like Wal-Mart and Target emerged, taking over the dominant role in Hollywood that national rental chains like Blockbuster once played. “On the sell-through side, VHS had been purely about family content,” says Mike Dunn, Fox Home Entertainment president. “A few live-action movies like ‘Titanic’ and ‘Independence Day’ were huge sellers on VHS, but when DVD came out, buying discs became a mainstream purchasing habit.” DVDs also heralded the arrival of deleted scenes, director’s commentary tracks, and other extras. Dunn considers David Fincher’s “Fight Club” to be one of the first DVDs supervised by a movie’s director. “Entertainment Weekly had given the theatrical release a grade of D,” Dunn recalls, “and when the DVD came out, they reconsidered and gave it an A, declaring it the DVD of the year and putting it on the cover. That was the first film that really used and defined the features you see today.” Meanwhile, aggressively exploiting its vast library on disc and pocketing a lion’s share of royalty riches, no studio profited from the DVD explosion like Warner. But amid the ascent of the DVD, Lieberfarb was fired from Warner in late 2002 after a clash with CEO Barry Meyer. Ten more good years? After making huge yearly leaps in the early part of the decade, DVD’s revenue growth has stopped. In fact, the first quarter of 2007 saw overall homevid revenue slide 5.1%, the biggest quarterly dip of the DVD era. Some wonder if digital downloading and cable video-on-demand libraries, coupled with consumer confusion over the two incompatible high-definition disc formats, could lead to a not-so-distant future in which consumers no longer use discs. At Lionsgate Entertainment, prexy Steve Beeks envisions a future where studios offer consumers a choice of high-definition discs, standard-definition discs and digital downloads on sites like iTunes and CinemaNow. (Lionsgate has joined the Blu-ray team and is majority owner of CinemaNow.) “I think for a long period of time, high-definition and standard-definition DVDs will coexist, since it’s going to take a long time for all of those standard-definition households to convert,” Beeks says. Disney homevid topper Bob Chapek is also bullish on Blu-ray: “The early numbers coming back from the Blu-ray format are exciting to see, as consumers are obviously voting with their dollars,”notes Chapek, whose studio is prepping to release the first two “Pirates ” films in the format. Many homevid vets don’t believe that discs — whether standard or high-definition — will be replaced by digital delivery anytime soon. “I’d be surprised if, four years from now, downloading of movies by consumers represents more than 7% of the total consumer spending on home entertainment,” says Bo Andersen, president of the Entertainment Merchants Assn. Lieberfarb agrees that discs won’t be let go of easily: “There is a reluctance to experiment with transformative models, for fear that it’ll cannibalize revenues in the short run.”
In the early 1990s two high density optical storage standards were being developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips and Sony, and the other was the Super Density Disc (SD), supported by Toshiba, Time-Warner, Matsushita Electric, Hitachi, Mitsubishi Electric, Pioneer, Thomson, and JVC.
IBM’s president, Lou Gerstner, acting as a matchmaker, led an effort to unite the two camps behind a single standard, anticipating a repeat of the costly format war between VHS and Betamax in the 1980s.
Philips and Sony abandoned their MMCD format and agreed upon Toshiba’s SD format with two modifications that are both related to the servo tracking technology. The first one was the adoption of a pit geometry that allows “push-pull” tracking, a proprietary Philips/Sony technology. The second modification was the adoption of Philips’ EFMPlus. EFMPlus, created by Kees Immink, who also designed EFM, is 6% less efficient than Toshiba’s SD code, which resulted in a capacity of 4.7 Gbyte instead of SD’s original 5 Gbyte. The great advantage of EFMPlus is its great resilience against disc damage such as scratches and fingerprints. The result was the DVD specification Version 1.0, announced in 1995 and finalized in September 1996.
World’s first DVD player
The first DVD players and discs were made available in November 1996 in Japan, March 1997 in the United States, 1998 in Europe and in 1999 in Australia.
By 2003 DVD sales and rentals topped those of VHS; during the week of June 15, 2003 (27.7M rentals DVD vs. 27.3M rentals VHS in the U.S.). Major U.S. retailers Circuit City and Best Buy stopped selling VHS tapes in 2002 and 2003, respectively. In June 2005, Wal-Mart and several other retailers announced plans to phase out the VHS format entirely, in favor of the more popular DVD format.
According to the Digital Entertainment Group (DEG), all DVD sales and rentals (films, television series, special interests, etc) totaled $21.2 billion in 2004. The sales portion of that was $15.5 billion.
In 2000, Sony released its PlayStation 2 console in Japan. In addition to playing video games developed for the system it was also able to play DVD movies. This proved to be a huge selling point because the PS2 cost about the same as DVD player but it could do a whole lot more. As a result, many electronic stores that normally did not carry video game consoles carried PS2s.
Following on with this tradition Sony has decided to implement one of DVD’s possible successors, Blu-ray, into its next PlayStation console currently known as the PlayStation 3. Microsoft’s Xbox, released a year after the PlayStation 2, also had the capability to play DVD discs with an add-on kit, cementing the DVD’s place in video game consoles.
Until 2003 consumers would have to choose a preferred DVD format and purchase the DVD media that was compatible with the specific DVD burner. In 2003 Sony introduced a multi-format DVD burner (also called a combo drive or DVD-Multi) and today many manufacturers offer multi-format DVD burners which are compatible with multiple DVD formats.
“DVD”
“DVD” was originally an initialism for “Digital Video Disc”. Some members of the DVD Forum believe that it should stand for “Digital Versatile Disc” to reflect its widespread use for non-video applications. Toshiba, which maintains the official DVD Forum site, adheres to the interpretation of “Digital Versatile Disc”. The DVD Forum never reached a consensus on the matter, however, and so today the official name of the format is simply “DVD”; the letters do not officially stand for anything.
The official DVD specifications are maintained by the DVD Forum, formerly the DVD Consortium, consisting of the ten founding companies and over 220 additional members.
Note that the “+RW” format, also known as DVD+RW, and the private format known as DVD-Slim was neither developed nor approved by the DVD Forum. The approved recordable formats are DVD-R, DVD-RW and DVD-RAM.
Immink
Kees (Kornelis) Antonie Schouhamer Immink invented an efficient technique to improve playing time and disc playability. His techniques have found widespread application in CD, DVD, and Blu-Ray Disc systems. His research resulted in around 1000 patents. Read his contribution in Advances In Optical Data Storage Technology.
Also see: First audio and video recordings