Peace pact paves way for digital video discs.

Backers of rival systems opt for single standard

Hollywood has avoided a potentially devastating civil war as competing factions led by Sony/Philips and Toshiba/Time Warner announced a compromise resulting in a single standard for the next generation of home entertainment - the digital video disc.

Seen as replacing the home videocassette with a single disc that carries full-length movies with digital graphics and sound, the DVD is also planned to become the format of choice for music and multimedia software.

The problem was that the Sony Corp./Philips Electronics NV and Toshiba Corp./Time Warner Inc. camps were developing slightly different types of discs.

Each side had hoped to set the dominant DVD standard for the entertainment industry, and therefore receive all the royalties from subsequent disc sales, much in the way Sony and Philips receive a royalty for each musical compact disc sold.

United front

But that competition gave way to cooperation, recently, when both sides announced in Japan that they would work together to develop a single standard for the DVD.

The announcement was greeted warmly by the entertainment industry, which feared competing DVD formats would make customers wary of entering the market for fear of buying the wrong equipment.

Distributors also feared the prospect of placing their product on the losing standard in the battle, or swallowing the added expense of placing their products on both the Sony- and the Toshiba-backed discs.

"Everyone was worried that it would be like the Beta vs. VHS dilemma that we had in the early 1980s," said Christopher Borde, associate analyst with entertainment research firm Paul Kagan Associates Inc.'s Los Angeles office. "Instead, you want consumers to all have the same format. This should maximize revenues, lower overall costs and create a unified front for marketing."

Interactive software business people also praised the news, as the DVD systems will be compatible with existing CD-ROMs and available for greater capabilities on future CD-ROM products.

"When you look at the personal computer, we are already overloaded with formats - Sega, Sony, IBM Windows, Windows 95, DOS, Mac," said Jed Weintrob, head of the independent film company Motion Picture Corporation of America's interactive division.

"The prospect of two different DVD platforms would have been the biggest nightmare in the world," Weintrob said. "Any sort of a standard is like a godsend."

1996 launch

A DVD looks much like the current musical compact disc or CD-ROM. However, it can store roughly 10 times the amount of information existing CDs can - up to 135 minutes of video and audio.

For motion picture companies, video and audio discs reportedly are superior in quality to videocassettes. For game developers, it means better graphics, and the ability to store far more gaming options and scenarios on a single disc.

Compact discs are also cheaper to produce than video tapes - about 90 cents a CD to about $2 for a videocassette.

All of which has the entertainment industry looking to the DVD as the wave of the future in the home entertainment field.

"This new high-density CD format will address all consumer and industry needs for a single music, game, motion picture and multimedia platform," said Michael P. Schulhof, president and CEO of Sony Corporation of America.

Sony Pictures Entertainment in Los Angeles has identified more than 150 movie titles for remastering in preparation for the DVD format, with those titles being released some time next year. Sony's music and computer wings are also exploring opportunities for the format.

DVD players should become available sometime in 1996 as well. The expected price for the units will be in the $600 range.

The compromise represents a watershed for the entertainment industry, said Warner Home Video President Warren Lieberfarb, who called DVDs "the first convergence production of the Multimedia Age."

"For the first time, universally accepted standards were established before the products were manufactured," said Lieberfarb. "The clear winner will be the consumer."