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TK's MORNING BUZZ: Several Hurdles Are Emerging That May Impact DVD's Rapid Growth

18 Oct, 2000 By: Thomas K. Arnold

While most everyone still regards the DVD market with cheery-eyed optimism, several hurdles are beginning to emerge that may impact the format's rapid growth.

Retailers are already reporting shortages of players, particularly on the low end of the price spectrum. This could slow the household penetration rate, since the cheaper players are designed to bring DVD to the masses and if the masses can't buy, then the masses won't switch.

Several studios, including DreamWorks Home Entertainment and Universal Studios Home Entertainment, appear to be shying away from the day-and-date release plan everyone was starting to embrace earlier in the year. There's been no official word as to why, but earlier in the year Universal executives, concerned over possible cannibalization with VHS, were reportedly mulling over exactly such a strategy. In most cases, the window is only a couple of weeks, but that could be enough to raise consumer skepticism--something you don't want to do in trying to establish a new format.

Add to that the fact that Sony is limiting PlayStation 2 shipments to a couple million units--hardly enough for the new wonder machine to be much of a factor in the DVD market--and continued replication problems that are seeing independent product pushed to the side, and the optimistic projects we keep hearing and reading about may begin to taper off.

To all parties involved: Please, let's not tinker with success now. For DVD to continue to flourish, you need to constantly reaffirm your commitment with both guns blazing.

And the key is availability. Consumers need to have ready access to DVD players and software, just as they do to VCRs and VHS cassettes. I already know one couple that was going to buy a DVD player, but, failing to find one in their price range (under $200) walked out of the consumer electronics store with a $46 VCR instead.

"We'll try again after the holidays," they told me.

That's not a very encouraging sign.

Comments? Contact TK directly at:TKArnold@aol.com

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