DVD’s official launch occurred 10 years ago, but its development spans two decades. Here’s a look at some of the key events that led to disc dominance:
Believing that movies stored on a 5-inch, CD-like format and priced under 20 bucks would entice consumers to buy instead of rent them, Warner Home Video topper Warren Lieberfarb urges Japanese consumer electronics makers to develop such an optical disc technology.
A partnership with CD pioneer Philips fails to produce a new format, so Lieberfarb and Warner team with Toshiba to develop better video compression and storage technologies. The new disc-based format is code-named “Taz,” after Warner’s iconic Tasmanian Devil character. Media parent Time Warner is soon granted 10 patents on it.
Toshiba and Warner invite Philips — owner of a number of key optical disc patents — to help further develop their new format. However, Philips soon ankles the collaborative, choosing to instead develop a rival standard with Sony based on core CD-related patents. A format war has begun.
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Sony introduces its Multimedia Compact Disc in December. A month later, Toshiba rolls out the new Super Density (SD) digital videodisc and announces the formation of the SD Alliance, a group of 11 gadgetmakers and studios.
Lieberfarb gains the support of the computer biz, which is looking to replace the CD-ROM. A group of IT companies, led by IBM exec Alan E. Bell, mediate a compromise between SD and MMCD that results in the Digital Versatile Disc (DVD). That pact is announced at Comdex in November.
Warner announces its first 30 DVD titles, a list that includes “Blade Runner,” “Casablanca” and “Twister.” Meanwhile, using the open DVD standard, Circuit City teams with an entertainment law firm to launch the rival pay-per-view format Digital Video Express (Divx), which ultimately loses $337 million.
About 1.4 million U.S. homes have DVD players and disc revenue hits $350 million. Lieberfarb works to bring holdouts Disney, Fox and Paramount into the fold. He gets the last on in, Fox, by convincing Time Warner to carry Fox News on its cable systems. Online DVD rental service Netflix is founded.
Par’s “Titanic” becomes the first DVD title to ship 1 million units. That pic will soon be surpassed by Warners’ “The Matrix,” which ships 1.5 million discs. Four million U.S. households have DVD players by year’s end, and Blockbuster announces the addition of DVD rentals.
TV compilation sets take off, with “Family Guy: Volume One” selling so well (1.6 million copies) that Fox brings it back to network life. DVD sales and rentals account for 52% of Hollywood’s revenue. Most DVDs are sold directly to Wal-Mart and Best Buy, displacing rack jobbers and distributors.
Revenue from DVD rentals and sales flattens out at around $24 billion — about $10 billion more, give or take, than what the entire vid biz was worth in 1997. Unable to reach an accord, two rival hi-def disc formats, HD DVD and Blu-ray, hit store shelves.