Optical disks.

OPPORTUNITY: Digital video discs (DVDs).

GROWTH OUTLOOK: DVDs (also called digital versatile discs) are so new that it is hard to predict the market with any certainty - though everyone believes it will be huge. The first video players for the new high-density DVDs hit the market in March, and DVD-ROM drives for personal computers are expected to debut this month. Infotech, a market research firm in Woodstock, Vt., predicts that 1997 will see sales of 900,000 DVD video players and 2 million DVD-ROM PC drives. By 2000, Infotech expects the installed base will be 8 million DVD video players and 43 million DVD-ROM drives.

Translating those figures into disc demand is not easy. Infotech spokesman Ted Pine says that after buying a DVD-ROM drive, consumers could be expected to purchase about 5 software titles during the first year of ownership. In the past, audio-disc purchases within the same year of buying a CD player have been a little higher than that.

Keep in mind that DVD is not one product, but at least four. The initial entry is the single-sided "DVD-5" with a capacity of 4.7 GB, more than four times that of today's CDs. Future versions will include the single-sided, dual-layer DVD-9 GB; double-sided, dual-layer DVD-18 GB; and DVD-RAM (rewritable).

MATERIALS USED: Polycarbonate will, at least initially, be the resin of choice, just as it has been for CDs. However, DVDs have four times as many pits as a CD, and those pits are shorter and narrower and the tracks are closer together. Consequently, polycarbonate resin suppliers are developing new grades with lower viscosity, which leads to lower birefringence, better pit replication, and a flatter disc.

PROCESSING SKILLS: Just because a manufacturer replicates today's optical media does not mean they are ready to handle DYD. Currently, only a handful of U.S. plants are manufacturing DVDs. Those facilities are operated by Warner Advanced Media Services, Nimbus CD International, Pioneer Video Manufacturing, Imation Optical Storage Solutions, and Kao Infosystems. By mid-year, several other producers, such as Sony, JVC, and Cinram/DMI, are scheduled to come on stream.

Although equipment manufacturers all claim to be able to update CD manufacturing systems for DVD production, processors should be wary. DVD experts suggest that you make sure to observe the equipment in action before you buy anything. Molding machines can generally be upgraded for production of DVD substrates. However, the disc-handling system has to be modified to allow sufficient cooling. Existing metalizers can be upgraded for DVD-5, but new equipment will be necessary for DVD-9. Inspection systems will also have to be upgraded and supplied with a tilt (flatness) measuring device. DVDs must be totally flat in order to play.

Many factors can affect flit, including printing and bonding. (Even single-sided discs have a double layer though one disc is blank.) Bonding the two discs together is a critical downstream operation that was not formerly required for CDs. It is an area that will likely see continuous change as the format develops.

The key to DVD is the master. As the format gains in popularity, mastering services are likely to be outsourced by some replicators. But to be in total control of the end product, replicators say investing in mastering is a must.