DVD-equipped computers take over the world!

Digital Versatile Disc (DVD)---the well-publicized successor to VHS tapes, compact discs (CDs), and CD-ROMs---will struggle in the video and music industries, but be a major success for the personal computer industry, according to a recent report from Forrester Research. The report concludes that PC manufacturers will rapidly embrace DVD, resulting in an installed base of 53 million DVD-equipped PCs by 2002.

The next five years will prove less favorable for the video and music industries' DVD efforts, however. In 2002, only 5.2% of US households will own a DVD-Video player, while only 2% will have a DVD-Audio player. As a result, Forrester believes that the PC will be transformed into a more viable consumer entertainment device.

"DVD will replace VHS tape, the CD, and CD-ROM. The question is when," contends Mark E. Hardie, senior analyst with Forrester's Entertainment & Technology Strategies and author of the report. "For the video industry, the first three to five years of DVD availability will be a low-volume disappointment. Lack of available titles, a high price tag, and the need to add expensive home-theater components will discourage consumers from purchasing a DVD-Video player that can't even record their favorite shows."

In 2002, 5 million players will be installed in the US, a household penetration rate of only 5.2%. In comparison, 89% of US households currently own a VCR. In the music industry, explains Hardie, plans to convert from CD to DVD have been slowed by lack of agreement over DVD-Audio standards. Furthermore, Hardie points out, it will be difficult to convince consumers that DVD offers any considerable advantages over CDs: "DVD-Audio will be a tough sell because music on CD is already in digital format and already sounds great. DVD-Audio sales won't take off until recordable DVD technology becomes widely available in 1999 or 2000."

Forrester predicts that DVD will be most successful in the PC industry. "DVD-ROM is the logical next step," asserts Hardie. "Game, edutainment, and reference titles will benefit from DVD's expanded audio and video capabilities, while immense storage capacity will reduce today's cumbersome 4-disc titles to one DVD." (Players of Riven can attest to the annoyance of having to frequently change CD-ROMs!) Hardie also notes that DVD drives can play existing CD-ROMs, so there's little reason for PC makers not to support the technology. "As DVD-ROM drives continue to drop in price, they'll rapidly replace existing CD-ROM drives in new PCs."

What will the rapid adoption of DVD-ROM mean? In short, that DVD's entertainment capabilities will be inextricably linked to computers for the next two to four years. "As business travelers enjoy full-length movies on their laptops and college students cue up DVD concert videos during study breaks, consumers will increasingly accept the PC as a viable and unique entertainment alternative."