IS THE WORLD READY FOR DVDS? : MANY HEDGE BETS ON LATEST FORMAT FOR MOVIES, DATA.

Byline: Peter M. Nichols The New York Times

You may be unaware of it, but Hollywood, in league with most of the world's major computer and consumer electronics companies, is about to make you a proposition.

Sometime in the near future - no one is exactly sure when - you will be offered a new super CD called digital videodisc, or DVD. On the disc, it is said, will be a two-hour movie, complete on one side.

Until now, of course, movies have come packaged in bulky videocassettes or spread over more than one side of a 12-inch laserdisc. Fitting a film onto a single side of a 4.7-inch CD is a startling concept.

The DVD, which resembles an audio CD in appearance, yields enormous amounts of visual and audio data at lightning speed and produces, its developers say, a picture quality that far exceeds videotape and even surpasses laser laserdisc, which is currently the highest video standard.

The multichannel sound accompanying the films, if played on high-quality equipment, is said to rival anything in a movie theater.

But there are questions. To begin with, how will the notion of movies on little discs strike people in the 87 million households in this country who have VCRs and play their movies on videotape?

``The studios don't want to panic the public into thinking VHS is going to be obsolete tomorrow, and all of a sudden you're going to have this new format you'll have to contend with,'' said Bruce Apar, the editor of Video Business magazine.

As for all the performance claims being made for the new format, everything remains to be proved. So far, no one outside the studios seems to have seen a complete film on DVD. In one recent test of consumer reaction to the new disc, participants were shown parts of a film, but on laserdisc, not DVD.

Right now, about the only thing a layman can be relatively sure of is that the disc will carry a movie. How good it will look and sound won't be known until the discs become available, and the timing is itself a matter of conjecture.

Until recently, the DVD's backers said that movies would be in stores by next month. Though there is still a chance that a few discs could be released by the end of the year, major decisions on production and distribution have yet to be announced.

So wait till next year, as they say, possibly late next year at that. The DVD is now on hold, while nearly 60 entertainment, consumer electronics, computer and communications companies finish negotiating over its development.

The process is taking longer than many people hoped, because DVD will carry not just movies but also many other kinds of entertainment and information. Matters are indeed complicated.

After watching the movie on your television set, you may flip the disc over and get a Web browser, a 26-volume encyclopedia or a video game for use in your computer. Or you may get music to play on your audio equipment.

Still pending are matters of precise coordination among the Toshibas, Microsofts and Disneys of the world. A significant problem with the CD-ROM, the relatively limited CD now in use with computers, is that it comes in 28 different formats, all of them incompatible with one another.

DVD developers say there will be no such incompatibility with the new disc. What works on one machine will work on all. But while a single technical standard is in the works, details remain to be ironed out and testing completed.

Perhaps the largest and thorniest issue under consideration is copyright protection: in blunter terms, how to prevent piracy. Safeguards are critical for movies and everything else in a digital format, because the quality of copies can be perfect every time, and the millionth bootlegged disk could be as pristine as the first.

After all of this is settled, it may be best if DVD unrolls gradually. People already have a lot of technology on their plates. It is thought that consumers will eventually want the DVD for its computer applications, but those are not expected to be available at least until next year.

As of now, the plan is to lead the DVD's charge into the home with the product everybody knows and likes and presumably wants: movies.

``They're the Trojan horse,'' Apar said. ``You get DVD into the house on the emotional pull of watching movies, and then you can market all manner of software.''

That prospect naturally excites some people in Hollywood. In recent years, consumers have been buying videocassettes by the hundreds of millions at prices ranging from $15 to $25. No price has been announced for the DVD; studio executives say it will be in the $25 range, though it could go much higher depending on the disc's other contents.

Not every movie studio has invested complete faith in the DVD, but none opposes the notion of selling its wares in trim packages that might encourage you to collect a lot of films, new hits and old library titles alike.

A prototype package created by Warner Bros. is slick: a light, flat container, about a half-inch thick, resembling a slender paperback.

Books, in fact, may be a good analogy in a broader sense. ``This is about whether or not the book business model can apply to the video business,'' said Warren Lieberfarb, the president of Warner Home Video and the movie industry's strongest proponent of the DVD.

But don't forget the other things that might be on the disc as well: the Web browser, audio tracks, another two-hour movie, a game with full-motion, full-screen video of a quality comparable to that of the movie itself, or a mail-order catalog or that encyclopedia, also with full-motion video.

Of course, some of these applications will necessitate transporting the disc between your television set or home-entertainment system and your computer. Industry analysts predict that in five years or so, everything may be accommodated on one screen, and such shuttling will no longer be necessary.

Meanwhile, to view DVD movies on your television screen, you will need a DVD player, which resembles a VCR. No price has been set for that either, but those in the know are suggesting $500 and up.

A caveat here: The DVD player will not record. At first, the DVD will be ROM, as in CD-ROM: read-only memory. Sometime in the future, though, you will be able not only to record on DVD but also to ``write'' on it, or make your own movies.

And another not so small detail: DVD's won't work with the CD-ROM drive that may already be built into your computer. A DVD holds 7.5 times as much information as a CD-ROM and requires a vastly more powerful drive. Computer makers say that by the end of next year they will be building DVD drives into their new machines. If you do not plan to buy a new computer and want DVD for your old one, you'll have to add a DVD drive separately.

True, many computer users and producers will be glad to move on from the CD-ROM and its comparatively low data-transfer rate, which gives full-motion video a washed-out, herky-jerky look. And no one will miss the incompatibility, which has confused consumers and stifled the inventiveness of software makers, who have had to work in one format or another.

``Programmers and publishers can work to one specification that can read on both TV and the PC,'' said Dan Sullivan, the director of licensing development for IBM. Compatibility also would broaden consumer acceptance of the DVD. And high volume should drive down costs, which would make innovation less risky for developers, thus leading to greater creativity.

IBM plans to substitute the DVD drive for the CD-ROM drive, Sullivan said. Some 30 million to 40 million computers with CD-ROM drives are sold annually in the United States. ``We have markets you can just plug into and get huge volume,'' he said.

Fine for the computer industry, but many in the movie business remain nervous about the DVD. Just because people are diving into personal computers doesn't necessarily mean that they'll feel the need for a new movie player, particularly with several billion cassettes out there.

Furthermore, movies may come before consumers fully appreciate the DVD's computer applications. Despite all the advantages of the DVD, the new movie players essentially will do what VCRs already do to most people's satisfaction: play movies. And they won't do what many people want: record.

DVD doubters point to the experience of the laserdisc. Since its introduction in the early 1980s, the disk has been touted as an alternative to videotape, but today it is in only about 2.5 million homes. Laserdisc players don't record either, but they offer superior picture image and have the space to incorporate extras, like interviews and documentaries about the making of films.

All of which sounds a little like what the DVD might offer the movie viewer, albeit in an interactive format and with computer options.

There is also considerable argument as to whether the DVD's picture quality will be better than the laserdisc's and whether enough people care about such things to matter.

``Americans are content-driven, not technology-driven,'' said Martin Greenwald, the president of Image Entertainment, a large producer of laserdiscs. ``That's one reason there are only 2.5 million laser households. When you talk about quality, you're talking about a very narrow field.''But in the end, quality or other specific characteristics may not make a difference. The DVD is digital, and digital is the hot new thing.

``No one strength or weakness of DVD is going to make or prevent the sale,'' said Apar, of Video Business. ``It's the fact that this is the most formidable package of technology ever. Over time, what is played doesn't matter; it's the CD format that counts. You can play anything imaginable anywhere imaginable. Cars, laptops, home, office.''

But won't the new format stir up confusion and rile that smoothly functioning cash cow, the home video business? ``If they're off even a little bit in the way they market this and how the public perceives it,'' Apar said, ``they may lose the very small window they have in the next four or five years to make this a viable successor to VHS.''

Some studio executives and hardware manufacturers favor an aggressive but calculated introduction. ``People are going to love this stuff,'' said Mike Fidler, a senior vice president of Pioneer Electronics, which makes laser players and plans to introduce a machine that plays both laserdiscs and DVDs.

Fidler joins Lieberfarb, of Warner, in the camp that favors getting players and movies on the market as soon as possible. He makes no bones about his motives. ``The consumer electronics market is soft,'' Fidler explained. ``Everybody wants DVD out there to stimulate interest in entertainment products.''

Home video, that is to say, needs a new generation of digital packaged goods to compete in the future with other methods of delivery, like direct satellite broadcast, cable television and telephone. ``The central issue is whether improvements in quality, size and price will enable the packaged media to coexist with network transmission,'' Lieberfarb said, ``whether consumers will relate to discs as something they own and collect rather than something that has value only in its momentary use.''

DVDs will be rented, but clearly Lieberfarb would like you to get used to the idea of buying videos. As pay-per-view transmission services offer more and more movies, some analysts say, they will be doing most of the renting, and people will be less likely to visit a video rental shop.

Because people are buying so many videocassettes, Lieberfarb argues, they will want to buy DVDs. Other studios - Disney, Paramount and 20th Century Fox - remain noncommittal.

``At the end of the day, we'll probably participate in DVD, but we're not going to dump our library into the marketplace,'' said Bill Mechanic, the president of 20th Century Fox. ``Right now, DVD is being pushed by one studio and the hardware manufacturers. More power to them. If they're right, we all make money. If they're wrong, it's their waste of time.''

In any event, what's the rush? Many in the movie industry contend that it might be better to release DVDs gradually while the technology takes hold.

Confronted with the problem of the chicken or the egg - too many players in the marketplace without enough discs or vice versa - conventional wisdom holds that hundreds of movies must be ready when DVD players are introduced and that the public will never accept a format that doesn't eventually have many thousands of titles available.

Less conventionally, Fidler suggests that, as a movie medium, DVD might be smart not to overreach, especially at the start.

``People won't want a lot of titles,'' he said, ``just the biggest hits, like `Twister' and `The Rock,' plus a good supply of evergreens.''

It will take the DVD years to replace the videocassette, if it ever does. Let inventories build slowly as people get used to the medium, he argues; meanwhile, the computer industry can carry the ball.

In fact, Hollywood can get in on the computer action itself and devise interactive programming of its own to accompany movies on DVD. Studios have long dabbled in CD-ROM programming, creating video games based on films and interactive movies, which allow viewers to choose among various plot turns and endings.

But in the main, studios have turned out little of particular interest or merit on CD-ROM. ``They take two steps forward and one back,'' Apar said. ``They don't understand it, and it's an enigma to begin with. No one has quite figured it out.''

By removing most of the technical restraints, DVD will allow many more kinds of programming. What they will be, of course, is up to the software makers.

Warner will probably start modestly, Lieberfarb said, putting music videos on its DVDs. But software developers at the studio talk enthusiastically about mixing multichannel audio and smooth, high-resolution video with text and advanced graphics.

Other makers of new media talk about trying to interest directors and writers in coming up with broader approaches to film on DVD. In the future, viewers may even encounter an as yet unimagined film treatment by the likes of Francis Ford Coppola.

Until then, how about a thriller and maybe an encyclopedia?

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Photo

Photo: If all goes according to plan, movies will soon be r eleased on DVDs - digital videodiscs the size of a CD.

The New York Times