Disney dives onto DVD bandwagon

Digital videodiscs (DVD), heir apparent to the immense homevideo industry, moved a giant step closer to marketplace viability Thursday when Disney lent the technology an all-important seal of approval by announcing its plans to start releasing film titles in the new format by the end of the year.

“We believe the timing is right to now offer Disney’s endorsement to this revolutionary format,” said Michael O. Johnson, president of Buena Vista Home Entertainment Worldwide. “We’re confident that our support of this technology will help foster its growth and consumer acceptance.”

Disney plans to release DVD titles at a rate of four or five a month, with the first titles hitting retailers’ shelves sometime during the fourth quarter.

Though the arrival of the studio’s animated fare on DVD is expected to be a major boon to retailers, the studio initially plans to release live-action films.

Specific titles, release dates and product prices have not yet been determined. DVD titles will be available for both rental and retail sell-through.

Because of Buena Vista’s dominance in the homevideo market, its support of the DVD technology was seen as critical to speedy, widespread adoption of the new home theater format.

The studio’s move should also convince remaining industry naysayers of the commercial viability of the disc.

“Its great news,” Warren Lieberfarb, prexy of Warner Home Video and seemingly chief cheerleader of the DVD format, told Daily Variety. “The entry of Disney into the DVD market ensures the success of this next generation of homevideo.”

Lieberfarb has been stumping for widespread industry acceptance of the format for several years. Universal recently gave the format the thumbs-up. Paramount Pictures remains the lone major studio sitting on the fence over releasing its homevid titles on DVD.

DVD proponents also view the format as a way of jump-starting the homevideo industry, which has seen mostly flat sales and rental revenues during the past three years.

Consumers have purchased more than 144,000 DVD players since July, according to the Consumer Electronics Manufacturing Assn.

“Our customers have told us they are very keen on DVD, and sales of the product have been steadily increasing,” said Ian Duffell, CEO of Virgin Entertainment, the corporate banner for the Virgin Megastore retail chain. “We think the (format) has tremendous potential.”

A recent report by the respected Bernstein Research delineated the studio’s potential profits from DVD sales, with each studio being assigned tens of millions of dollars in additional revenue with little cost incurred bringing the product to market.

One of the most important properties of DVD is its relatively large storage capacity — up to 7 hours of standard video — leaving ample room for additional video or other multimedia material, such as film trailers or making-of featurettes, to accompany a standard-length film.

The first Disney releases, however, will not provide any additional information beyond the featured film title, similar to current videotapes.

Disney said it had delayed its dive into DVD until recent refinements in the technology allayed the studio’s fears of piracy.

“We’re impressed with the strides that have been made in both technology and security,” Johnson said.

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