DVD, The Studios and DIVX

Everybody is aware of the benefits of DVD to the consumer. It offers the best picture and sound quality available in the home today, and also offers lots of extra bonuses and features on most discs. All at prices which are reasonably affordable.

What everyone may not be so aware of are the benefits of DVD to the entertainment industry as a whole.

VHS has pretty much reached its saturation point in the industry. The only movies people are buying in huge quantities on VHS are newer releases, and for the most part the back catalogs are stale. There are a few exceptions to this, for example Disney's releases which are allowed on the shelves for limited periods of time and then re-released usually around a decade later. There are also some "classic" titles which have never been available for sell-through, and as such sell quite well in their initial releases on VHS. Still, sales figures are not what they were even five years ago, and so the studios need a new revenue stream. Enter DVD.

Disney doesn't make as much money from their catalog of animated titles as they used to, now that the VHS market has been saturated with sell-through movies. Once the DVD market hits 3-5 million players (probably this year), we should expect to see Disney starting it's "limited release" program on DVD. The nice thing about this happening is that Disney gets more money (like they really need it, but it does keep the shareholders happy) from the same old product. In five to ten years when they re-release it on DVD, the DVD market should still be growing (unlike the stagnant VHS market) and because of that growth Disney will be able to actually increase its revenue streams rather than have them remain flat. Let's face it, the only people buying VHS players these days are people who are replacing a broken one. They're not going to re-invest in new VHS tapes. Once recordable DVD hits the market (probably affordably in 2-3 years), it will mark the beginning of the end for VHS.

DVD offers the studios a whole new way to make money. They can release their back-catalogs on DVD, and fans of the film will find them. This will allow them to generate new revenue streams from old products (and only in movies and music is this really possible) with a minimal investment. There was never any question that every major studio would support DVD. The only question was how long it would take for them to jump in. Now that all the major studios are playing in the DVD market, expect to see movies released and re-released (with extra content, new transfers, whatever it takes to make them "A-list" again) on DVD in the next few years as the studios try to woo new DVD purchasers. It's an interesting situation because when VHS started out, the industry never really saw it as a sell-through format (in fact, they saw it as a serious threat to their business - ironic, isn't it?), so they never took advantage of it until at least ten years in. Obviously the story with DVD is not the same.

The other benefit to the industry, though, is in the introduction of new talent. Most good DVDs include supplemental material including photos, interviews, documentary featurettes, etc. There are of course, people who have to put this stuff together. This means more entertainment jobs as a whole.

Steven Spielberg started out directing for television, and eventually moved into features. David Fincher started with music videos (his masterpiece being, in my opinion, Aerosmith's Janie's Got a Gun video - which is available on DVD on "The Making of Pump"). Even psychotic American History X director Tony Kaye started with commercials. DVD features and supplements offer a whole new way for wanna-be directors, producers, writers and even actors to break into the industry. How long until we hear about a new up and coming director whose first work was the documentary on the Star Wars DVD?

This is great news for the industry as a whole. DVD means added revenue streams, new content providers, and of course new customers. The only kink in the slinky (so to speak) is the presence of DIVX.

Now, DIVX is not the threat that people perceive it to be. It isn't some all-consuming monster which will kill DVD. It is, however, a threat the harmony of the DVD market. It'll never gain mass acceptance for a number of reasons. First and foremost, it's expensive. Compared to a rental from Blockbuster or the corner video store, DIVX discs typically cost 30-50% more. Secondly, it's available ONLY in the US, and only at select stores (primarily Circuit City). The longer DIVX is not available in other countries, the less likely it will succeed as a format. Given strict US law about exporting encryption (and decryption) technology, I wouldn't hold my breath for DIVX in Europe, or anywhere else in the world. Third, DIVX requires a huge infrastructure to support. Even if DIVX were able to export their technology today, they don't have the resources or capital to set up the infrastructure (not to mention launch funds) necessary to get it out there. Even if the rumors are true and Blockbuster dumps a few hundred million into DIVX, it'll only be a temporary solution. Blockbuster isn't interested in DIVX, they're interested in hedging their bets because of competition from pay-per-view (and eventually video on demand).

So obviously, DIVX is dead in the water, so why is it a threat? It's a threat because it confuses the consumer. Especially when crooked Circuit City salespeople are feeding every customer the "DIVX is the Bomb" line when they come in the store. It introduces an element of chance to a DVD player purchase, and as such turns the consumer off. I feel much the same way about DTS sound, but at least a DTs disc will play on a non-DTs player

Now, I'm not suggesting that anyone should lose significant amounts of sleep over DIVX. It was more of a concern when DVD was just getting started, but now that DVD is firmly entrenched in the marketplace (and getting more so every day), DIVX is a minor blip on the radar. Circuit City and Digital Video Express' inept marketing and communications departments are more than taking care of DIVX by themselves. The added support for a public flogging of DIVX and its founders from web-sites like this simply add a few more nails to an already sturdy coffin.

I notice over at the DVD File page (www.dvdfile.com) , that Peter M. Bracke is opposed to the Warner Brothers budget titles. I have to say that I categorically disagree. Since not every movie deserves a special edition, I would say that it's probably a great idea to release as many movies as possible, as quickly as possible. For example, my wife is the sole person the planet who thoroughly enjoys Hudson Hawk, and who are we to criticize that (ahem)? She should be able to see it on DVD if she wants, but it's certainly not worthy of the production time or facilities necessary to produce a special edition. Better that it's on DVD in a limited capacity than not at all. Peter's article (and site) is great, though, so check it out! You won't regret it.

To add a new feature this week, I'm going to lift something from one of the columnists over at Mr. Showbiz (mrshowbiz.go.com). In Jeffrey Wells' Showbiz Confidential column (which seems to run about three times a week usually), he quotes lines from movies, then asks his readers to email him with who said it and which film it's from. Now, this is a great idea, except quite frankly this guy knows movies which are waaaay too obscure for me. Sometimes they're easy, but usually he'll grab two or three lines from different movies, so I'll usually only get one of them. I'm going to make it a little easier, I'll quote one line, and it may or may not be obscure. Of course, there are no prizes, I mean this is all just for fun, but the first person to answer each week will get his or her name run in this column (woohoo! Instant fame...forget fortune...)

To start this new feature off, I submit the following:

"I totally loogied on that good dead me!"

Anyhow, enough rambling from me...until next time, go watch a movie!