Thou Shalt Buy DVD Prices of DVD players have plummeted, and disks can now be rented easily. This technology is finally ready for its closeup.
By Mike Himowitz

(FORTUNE Magazine) – There's a home theater coming to a TV set near you. No, it's not the kind that requires a dedicated room with motorized curtains and a high-limit Visa card. It's a gadget that hooks up to your regular old TV but plays movies that look and sound like nothing you've seen or heard before.

It's called a DVD player, and for years people have been saying that it may do to videotape what the compact disk player did to vinyl records. That's because the basic technology is great: It can reproduce a movie or concert with a visual clarity and audio fidelity that neither tape nor broadcasters can match--and it also plays your music CDs with the same great audio quality. A DVD (which stands for digital versatile disk or digital video disk, depending on which industry type you ask), is a beefed-up CD that can store an entire feature film in digital format, along with multiple sound tracks, subtitles, directors' cuts, shots from multiple angles, and other goodies. If DVD players haven't crossed your radar screen yet, you won't be able to escape them once this Christmas shopping season gets under way.

You see, the consumer-electronics industry regards DVD as its hottest new product since the Walkman and thinks Christmas 1999 will be the technology's mass-market breakthrough. The industry is right, for three reasons. First, with more than 20 manufacturers now making DVD players, competition has pushed prices down--way down. You can still spend $2,000 for a high-end player, but this winter you'll find plenty of solid performers on retailers' shelves for $200 to $400. Second, all the major movie studios now issue new releases on DVD as well as videocassette, and they're pumping out scores of back titles every month. This summer the DVD version of The Matrix sold a million copies--the first disk to hit that mark. And third, major video rental outlets like Blockbuster and Hollywood Video are stocking up on DVDs. Unless you depend solely on the local mom-and-pop video store, DVDs are now as easy to rent as a video. The bottom line: DVDs aren't just for video geeks any more. You can buy a player without breaking the bank, and once you get it home, you'll be able to do something with it.

Two years ago a flood of press hailed DVD as the Next Big Thing. One reason it has failed to wow the world up to now is its curious position in the market. DVD machines play videos but don't record them yet. So people who tape TV shows on their VCR aren't likely to replace that machine with a DVD player. And while DVD machines are thought of mostly as movie players, the machine they are likely to displace in many households is the single-purpose compact disk player. Indeed, manufacturers are already selling multidisk DVD changers--not because we want five movies on tap, but because that's the way we like to play music CDs.

Sales soared this year as prices came down. In the first nine months of 1999, manufacturers shipped almost two million players--pretty remarkable for a machine that didn't exist three years ago. The Consumer Electronics Manufacturers Association predicts total sales of three million units by year-end. Mike Fiedler, Sony's vice president for DVD marketing, says that figure could easily double in 2000. "The market is really ready for this," he adds. "There's a real 'wow' factor at work here." There may also be a wow factor for people like Fiedler, who hope that buyers snapping up DVDs will also want bigger TV screens, better audio-visual receivers, Surround Sound speakers, and other high-margin home-theater goodies.

The technology behind all this builds on the past and leaps into the future. Like digital audio, DVD turns a movie or video broadcast into a series of ones and zeros, and burns them into pits on the tracks of a mirrored, 5 1/4-inch plastic disk. A DVD player reads those ones and zeros by bouncing a laser beam off the disk, then converts them into video and audio signals that can be pumped directly into your TV or home-theater system.

Now let's take that leap into the future. Whereas music and computer CDs can store 650 megabytes of data--enough for 74 minutes of two-channel stereo sound--DVDs can store more than seven times as much. That's 4.7 gigabytes of information in a single optical layer, or enough for 133 minutes of video. Publishers can double that capacity by adding a second storage layer and quadruple it by using both sides of the disk. DVD-ROM drives for computers use the same technology, making this disk a triple threat that handles video, music, and software applications and multimedia. Over the next couple of years, most PC manufacturers will offer DVD drives as a standard feature.

At home, the first thing you'll notice when you check out a DVD is the picture quality. DVD players can generate a 500-line image--twice the resolution of the best VHS videotape. When I hooked up a DVD machine to my 12-year-old TV and popped a copy of Top Gun into the drive, I couldn't believe I was watching the same set; the image was incredibly sharp and stable, with none of the jumpiness, bleeding, shaking, or blurring I'd taken for granted with rented videotapes. That's giving new life to classics like Gone With the Wind and The Ten Commandments, which the studios have remastered for DVD. When I first saw the colors on these classics, I was amazed: Neither Scarlett nor Moses has ever looked this good on a TV screen. And unlike videotape, which degrades with each playing, DVDs are virtually indestructible. Even if you're the 500th customer to rent the DVD of Willy Wonka and the Chocolate Factory, you'll get the same high quality as the first guy did.

Audiophiles are in for a treat too. All DVD players can deliver 5.1-channel Dolby digital Surround Sound to high-end audio systems. (For the untweaked, that 5.1 means three speakers in front of the room, two in the back, and a subwoofer for booming bass.) Even if you plug the DVD player in to a plain two-channel stereo system or your TV's audio input, you'll get crisper, cleaner audio. Some players include virtual Surround Sound, which fakes a three-dimensional speaker system on two standard speakers--with varying degrees of success.

DVDs are loaded with other cool features that videotape can't match. Many disks offer you the option of seeing a movie or concert from multiple camera angles. Others come with versions dubbed into different languages. (The multilingual champ, by the way, is a remastered version of Jesus, a 1979 production of the Gospel of Luke with sound tracks in English, French, Spanish, Portuguese, Korean, Mandarin, Japanese, and Arabic. That's enough for this evangelical DVD to be understood by half the people on the planet.) One popular feature is dual formats; you can choose to watch the movie in letterbox format, which mimics the width of a big movie screen by sandwiching the picture between two black bands, or have it fill your TV or PC screen, in which case the edges of the picture get cut off. Studios toss all kinds of goodies onto their DVDs: Besides the movie itself, DVDs can provide trailers, documentaries about how the film was made, cast biographies, photos, quizzes, outtakes, and even alternative endings. My favorite is Midnight in the Garden of Good and Evil, which includes an interactive tour of Savannah. And you can control all this from an easy-to-use remote, which also makes fast-forwarding and rewinding easy by enabling you to leap from scene to scene just as you move from one track to another on a music CD. Heck, the remote even makes it easy to program the time into your DVD machine--say goodbye to the flashing 12:00 on your VCR.

What's perhaps most amazing about DVD is that it exists in a form consumers can enjoy. The giants of consumer electronics usually spend years and years duking out a new technology, as each company tries to get its standard adopted. This typically makes losers of a bunch of consumers--like the people who bought eight-track tape players in the '70s or BetaMax VCRs in the '80s. This time, rather than release a bunch of incompatible products, ten of the largest players, including Sony, Philips, Matsushita (Panasonic), Pioneer, Toshiba, and Hitachi, got together in 1995 to hammer out an agreement on what DVDs should look like and how they should work. Since then, naturally, there have been some squabbles. A couple of major studios took years to start releasing their movies in DVD format. Circuit City decided to promote a confusing, pay-per-view version of DVD called Divx, which met a well-deserved death in June. But on the whole, the industry has held together. "It's one of the first products in consumer-electronics history where you had unity on the hardware and software from the beginning," says Matt Dever, Pioneer's vice president for home-electronics marketing.

Unlike some other technologies, DVD has avoided the chicken-and-egg syndrome--people won't buy players if they can't find movie disks, and studios won't produce DVDs if there aren't enough players. There are now between 3,000 and 4,000 DVD titles for sale at prices ranging from $15 to $30 each. The hottest new titles are available through everyday retailers like Circuit City and Best Buy, while the best selection of older movies is available through Web retailers such as and Most of us, of course, prefer to rent movies, and until recently, renting DVDs was a problem. But in January, Hollywood Video said that it would stock DVD titles in all 1,300 outlets, and just last month Blockbuster Video announced that it would carry DVDs in 3,800 stores nationwide. Now that those two have signed on, DVD truly is ready for prime time.