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DVD survives test

After 4-month trial, U.S. rollout set for fall

Mainstream audiences have yet to decide whether it’s good or bad, but starting in the fall DVD will be at least nationwide.

A consortium of four major homevideo players — Warner Home Video, MGM Home Entertainment, New Line Home Video and HBO Home Video — announced Tuesday they would expand distribution and release of DVD titles to embrace the entire country beginning this fall, after what the quartet termed a “highly successful” four-month, seven-city trial run for the new medium.

Warner Home Video president Warren Lieberfarb noted that his outfit has already notched nearly 1 million DVD unit sales since the trial run’s start in March, adding, “Now we want everyone to have access to the DVD experience.”

Since the format’s consolidation and commercial arrival last year, consumer anxiety about it has largely centered on the availability of software for the players, which can be used in a homevideo system or a home computer setup. But with the 100-plus film and other longform titles that the consortium’s announcement represents, that anxiety might recede.

Retail reaction to the announcement, which came as something of a bombshell for the homevideo executives assembled in Las Vegas for this year’s Video Software Dealers Assn. convention, is similarly upbeat. Major music/video retailers such as Musicland Inc. and Tower Records have noted considerable success with the DVD titles thus far available, and are clearly pleased that national distribution will now be the norm.

“We anticipate an enormous reception to the national availability of … DVD product,” said Tower chieftain Russ Solomon, while Musicland CEO Jack Eugster was enthusiastic that the national chain will “now be able to move DVD product into the rest of our stores.”

The four companies and their respective chieftains are confident that given a critical mass of software availability, DVD hardware sales are likely to be driven anew by hot film titles combined with the format’s well-trumpeted sonic and visual potential.

It comes as no surprise that three divisions of Time Warner Inc. should jump on the DVD bandwagon, since the media giant has been intimately involved in the format’s development, thanks to its strategic relationship with Japanese electronics hardware giant Toshiba Corp. And Warner Home Video has been in the vanguard of DVD software distribution since the medium’s technological aspects — including video compression and audio encoding methods — were finally standardized late in 1996.

MGM sends a signal

But the inclusion of MGM Home Entertainment among the DVD-converted is a strong signal that broader industry acceptance of the medium may come more quickly than expected.

“No question we felt that we should walk before we run in the distribution of DVD,” said David Bishop, prexy of MGM’s homevideo division. “But given the very positive results we’ve experienced from the trial run, we’re sure we’ve embarked on an intelligent, exciting course of action as regards DVD.”

Bishop said MGM would distribute more than 60 titles from its extensive library on DVD by year’s end, all of them priced at $24.98 per unit. “We feel that certain titles will have more potential rental interest than others, and we might well react to that when we have enough data to warrant a switch,” Bishop said. “For the time being, though, DVD is primarily a sales-driven medium.”

Though MGM’s embrace of DVD may spur a number of second thoughts regarding the medium at other major entertainment concerns, it may not happen immediately. The Walt Disney Co., 20th Century Fox, Universal and Paramount have all remained on the DVD sidelines thus far, and none of them are likely to become instant converts, primarily because of ongoing concerns about the format’s copyright and copying conventions.

New demos on board?

For its part, New Line Home Video execs regard DVD as the optimal format for many of its library titles, and feel it might not only energize sales of DVD hardware — the prices of which range from $450 to $800 — but also stimulate interest in traditional nonvideo demographics.

“All I know is that nowadays my 13-year-old son would rather pop in a DVD movie than log onto the Internet,” said the division’s president and chief operating officer, Steve Einhorn, “and that’s a considerable achievement, believe me.”

Einhorn said New Line will price its 17 DVD releases for 1997 at $24.95 per unit, and expects the format to likely remain a medium driven by sales as opposed to rentals. “In fact, we fully intend to remix and remaster existing video titles in order to take advantage of DVD’s obvious superiority in terms of sound and image,” he added.

Warner Home Video intends a full-court marketing press for DVD generally and its titles in particular between now and the Christmas season, and plans to distribute more than 120 DVD titles this year.

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