The Coming DVD Wars

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Oh, goodie. There's a new generation of DVDs coming on to the market. Why do we need a new generation? It couldn't possibly be that the makers of DVD equipment just want to sell us expensive new stuff, could it? Oh, no, no, no. They tell us that it's because today's DVDs can hold a full, standard-resolution, feature-length movie, but they can't accommodate a high-definition version. This is exceptionally important to me because, heaven knows, if Julia Roberts has a nearly microscopic pimple on the end of her nose, I definitely want to know about it.

In addition, the people who produce DVDs tell us that they would like to be able to fit a few seasons' worth of a classic television show onto a single DVD, which they can't do now. Good for them. I would hate to have to change discs in the midst of a marathon screening of The Gong Show reruns.

You might think that I'm building up to a good rant about the fact that my DVD player is going to become obsolete. You would be wrong. I'm not thrilled about it, but I don't have a huge investment in DVDs, and the video stores will probably carry the old format for quite a while yet, just as they still carry a few copies of VHS versions of some movies that just about nobody wants to see.

My tirade is not about the coming of a new, disruptive technology. After all, you can't fight progress. Well, you can, but you will lose and get depressed, and I already get depressed enough, thank you very much. My complaint is that we aren't going to get just one new DVD generation. That would be far too easy and make far too much sense. Instead, there are going to be two new, incompatible formats battling it out in the marketplace. Haven't we heard this story before? Do you remember Betamax? (If you don't remember Betamax, ask an older sibling about it.)

Lined up on one side of the battlefield are Toshiba, NEC, and Sanyo with their HD-DVD standard. Opposing them is a consortium that includes Sony, Matsushita, Hitachi, and Philips. The consortium's standard is called Blu-ray. Both technologies use blue lasers that can read considerably more data off of the same size disc than the red lasers used in the first generation of DVD players.

As far as I can tell, nobody is particularly happy about two different standards coming to the market. The manufacturers are reasonably sure that one of the two formats will die, but only after consuming an enormous quantity of R&D, equipment, marketing, and distribution dollars. Of course, they are all absolutely certain that it will be the other guys who will lose. Half of them will be wrong.

The people who produce content are going to have to choose one format over the other or go to the expense of producing their material in both formats simultaneously. These companies will have to either knowingly exclude themselves from one large part of the market or allow significantly higher costs to eat into their profits. What a great choice that is--death by starvation or death by blood loss.

We consumers aren't in any better position. Just as happened with VHS versus Betamax, one standard will probably eventually win and the other will disappear. Some former Betamax owners are still grumbling about that. Like them, if you choose the wrong new DVD player, it will likely be almost totally useless soon after you buy it.

Some people speculate that companies will come out with dual-format players so that we won't have to choose. The only problem is that HD-DVD and Blu-Ray are so radically different that dual-format players are expected to be very expensive since the two formats won't be able to share many components. Great. We're going to be asked to empty our bank accounts either to buy dual-format players or to buy the successful format after we throw out the failed one, just because the vendors can't get their act together today. That's just wonderful.

I've always avoided this problem in the past and expect to do so again this time. I am proud to say that I don't have nor have I ever had an old Betamax video player or an 8-track audio player sitting in my discarded-technology closet. (If you don't know what an 8-track is, ask your parents.) I'm no better at picking winners than anyone else. There is a much simpler reason why I never lose the technology standards wars.

In marketing school, they taught me that when you launch a new product category, you should work particularly hard to find, understand, and communicate with two market segments that marketers call "pioneers" and "early adopters." The pioneers are those geeks who are more than merely willing to try your new product. In fact, they are intensely eager to do so. If you didn't want them to try it, you would have to beat them off with a stick or possibly a weapon of mass destruction. The early adopters aren't quite as enthusiastic, but once the pioneers have tried it and given it their seal of approval, the early adopters will quickly jump in.

Of course, the pioneers and early adopters are not the same people for all product categories. Nonetheless, when it comes to almost all products, my fellow marketers usually don't classify me as being in either the pioneer or the early adopter segment. Instead, they label me as what we in the marketing profession call the "absolutely, positively, without any doubt whatsoever, last adopters on the planet and likely in the universe" segment. Surveys show that there are only six people in North America who do not yet own a microwave oven, so, with just five other people left, I might get around to buying one soon. Fortunately, my technology procrastination should stand me in good stead when it comes to DVDs. By the time I get around to buying one of the new-generation DVD players, there will be only one format left standing.

Enough about me. Here's some advice for all of the pioneers and early adopters: Pick your side quickly. There are only 11 shopping months left until Christmas. And there are only 23 shopping months left until you replace your new DVD player with the winning format the following Christmas.

Joel Klebanoff is a consultant, a writer, and president of Klebanoff Associates, Inc., a Toronto, Canada-based marketing communications firm. Joel has 25 years experience working in IT, first as a programmer/analyst and then as a marketer. He holds a Bachelor of Science in computer science and an MBA, both from the University of Toronto. Contact Joel at This email address is being protected from spambots. You need JavaScript enabled to view it.. He reports that the microwave thing was a joke. He probably won't be buying one any time soon. The Board of Health closed his kitchen, so he really has no reason to buy any kitchen appliances.

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