DVD - The great DiViDe

Wait for DVD, advise the vendors - it will eclipse CD-R, they promise. But there are inherent difficulties in obscuring an established technology with an invisible one.

If awards were to be given for the most gullible industry in theomise. But there are inherent difficulties in obscuring an established technology with an invisible one. world, the computer industry would take first, second and third prize.

If there's marketing hype to be had, the industry laps it up.

It's like OS/2, the next operating system for us all. Like the Ace consortium, a computer for the future. Like OS/2 (again), the next operating system for the desktop. Like Risc chips - it's the way of the future, Intel doesn't stand a chance. And like DVD - it will hold everything you can think of and it will be here tomorrow (see box, page 23).

It's as if we haven't learned anything. The market - for no obvious reason and without much evidence - has been muttering 'DVD is coming, DVD is coming' for more than two years. And while there's no doubt it's on its way, the DVD train is running more slowly than predicted and is also splitting into several different branchlines, each with a different standard.

To make things worse, figures from research company IDC show that while DVD isn't going away, the rival offerings of CD recorders (CD-R) are selling in tens and thousands more than DVD drives. This confuses an already muddled market, which has been told to wait for DVD even though ostensibly there's little to choose between the two. Recordable CD players allow users to write their own CDs, either as a distribution medium or as a backup device, while a few make copies of audio CDs on the side.

Bob Peyton, director of European storage research at IDC, thinks the two devices pose a simple choice for users: 'The question is, what will people want next - DVD with more capacity or CD-R, which has more functionality?

Both play CD-Roms but do different jobs for the user.'

He highlights the split between Europe and the rest of the world. 'In Europe, we're expecting a much slower adoption of DVD, primarily because there are more business users and more language problems,' he says. 'Europe has lower penetration of the home user, who is more sensitive to the games and movie aspect.'

Peyton believes DVD is likely to appeal to home users because of the entertainment aspect (film and multimedia) rather than any extra computer functionality.

In the US, DVD is already taking off in the home entertainment market.

The more home DVD units you sell, the greater the knock-on effect on the business market and the more chance there is of the business DVD market taking off.

But is CD-R just making a last gasp comeback before it disappears forever?

'Absolutely not,' Peyton insists. 'It's been the most successful rewritable optical technology ever and Europe represents about 40 per cent of the world. There were 470,000 CD-R and CD-RW (recordable and rewritable) sold in Europe in the first quarter of this year, so it isn't quite dead yet.

It's been growing at between 100 and 200 per cent for the past four years.' This, he says, 'compares rather well with the 30,000 DVDs sold in the same period of time'.

Peyton believes the confidence of the CD-R market is reflected in its pricing: 'In the first quarter, we had 470,000 CD-Rs and CD-RWs and they were selling into the channel at more than $200. This means they retailed at about $300 to $400, which is a very high price for that kind of product.

Items such as Zip and LS120 have got to about 600,000 units a quarter and sell for less than $100, so the size of the CD-R market is significant.'

He adds: 'What's amazing is the current prices of CD-RW and their volume - and the expectation is that they'll be half their current price by next summer.'

The problem for DVD is two-fold, because it reads CD-Roms as a matter of course, its integration into current PCs by the likes of Gateway and Fujitsu ICL is effectively invisible. The drives will only come into their own when DVD software becomes available.

But before rewritable DVDs can take off, there need to be machines on the market with built-in DVD because it can't write anything that can be read on a CD-Rom drive. And of course, most CDs and late DVDs can read the CD-R output.

Gateway is fitting DVD drives to about half of all the PCs it ships and is therefore sensitive to the growth of CD-R and the potential flattening out of DVD's growth.

Aideen McCracken, consumer segment manager at Gateway, explains how the vendor is handling DVD: 'We're putting DVD into most of our consumer multimedia configurations, and CD-Rom into our business or professional configurations.

We're looking at CD-R but haven't launched anything yet because we have had compatibility issues with the products we have looked at.'

So does this mean DVD will be slower to take off than anticipated? 'No, not at all,' McCracken claims. 'We see it as having two different applications.

We will only supply CD-R as an option, but we will continue to bundle DVD onto our consumer configurations because we believe it offers our customers a high level of value.'

Gateway isn't going to force the technology onto users, she adds: 'We'll make it an option on any PC but not standard. We're about two or three months off.'

Dave Pritchard, Fujitsu vice president of mobile computing, is more optimistic about the rise of CD-R. 'I agree there will be more CD-Rs sold than DVDs,' he says. 'The basic reason is that most people have a CD-Rom drive and if you are writing something you want most people to read, you'll need a CD-R. There are very few DVD drives on the market.'

Pritchard doesn't think DVD-Ram (read-writable DVD) is ready for the market. 'At the moment, we're only shipping readers, but we're monitoring the writers market closely because readers aren't going to take off until writers exist. If you look at the CD market now, the advantage of having a CD writer next to your machine is back-up. Until DVD has writers available and can read back on other people's machines, it isn't going to take off in a big way.'

But if DVD-Rom is still waiting to happen, why is Fujitsu shipping it?

Pritchard is unfazed. 'The real reason is that it's a taste of things to come,' he says. He believes the DVD drive is an education: 'This is the way to do company videos and multimedia training - you can see it being launched in places where people can evaluate it.'

But for DVD to work on any level requires software that uses its massive storage capability. In the US, Microsoft has a DVD version of its Encarta Reference suite - which weighs in at about four CD-Roms - but what plans does it have in the UK?

'The first thing we'll do is bring out a DVD version of Encarta Reference suite, the 1999 version, which should be here at the end of the year,' says Gillian Kent, group marketing manager for consumer products at Microsoft.

'We see DVD as the next stage of storage. Just like the move from floppy to CD, we see CD moving to DVD. For us it's a logical progression to go to the next stage of storage and we'll take advantage of it.'

Kent is frustrated that the manufacturers are stalling. 'We are in this chicken and egg situation, where a lot of publishers are waiting for DVD to take off and to be installed as standard, so we'll continue on CD and DVD.' But she is adamant: 'It's just a matter of time before we move over to DVD.'

While the manufacturers' marketing people tell us DVD will be here 'soon, very soon', there is very little help forthcoming to produce devices that can be sold on easily. Meanwhile, as they see their market take off, some of the same manufacturers are finding very good reasons to continue to build CD-Rs and CD-Roms.

Will DVD become Goliath?

Just because they're all called DVD doesn't mean they're all the same thing, or indeed all compatible.

Currently, most DVD-Rom drives are second-generation units that will read CD-Roms, but there are more iterations of discs to come.

In basic terms, DVD is a bigger bit bucket than a 660Mb CD-Rom. DVD-Rom discs look just like CDs but their storage capacity ranges from 4.7Gb to 17Gb.

DVDs can have one or two layers of data per disc side, which provides four flavours of read-only DVD-Rom - DVD5 (single side, single layer) with a 4.7Gb capacity; DVD9 (single side, dual layer), 8.5Gb; DVD10 (dual side, single layer); 9.4Gb; and DVD18 (dual side, dual layer), 17Gb.

Double-sided drives for PCs won't happen for a while, if at all, because they are essentially two drive mechanisms in a single unit. Double-sided, double-layered 17Gb discs won't be entering the market for a while and when they are, they will almost certainly need to be turned over by hand.

The movie format is called DVD Video. It isn't a format as such but a definition of the logical directory and file layout on a standard DVD-Rom. The films are encoded as MPEG II files with CD quality audio.

Until now, viewing the films required separate MPEG decoders, but Intel is pushing the soft decode option where everything is done on the processor.

Intel says users with a 400MHz Pentium II, with the latest 100 MHz system bus and BX chipset, will be able to decode the DVD Video files' MPEG II video streams without dropping frames, with about 40 per cent head room for other applications.

And then there's the read-writable area, which resembles a giant game of Twister. Over the past 18 months, it has been transformed from pretty simple to downright confusing.

At the beginning of last year, when DVD-Rom drives were about to ship, the promised DVD-Ram standard - a single rewritable version of DVD - appeared to be just around the corner and looked likely to be the future for optical storage in general. Today, however, there are two DVD formats vying for first place, with two more in the background - DVD-Ram and DVD+RW.

Rewrite my fire

Until August 1997, all seemed to be going according to plan. The DVD Forum, which comprised 10 companies, was developing a rewritable DVD specification.

But just as the DVD-Ram specification was getting the thumbs up, DVD Forum members Philips and Sony joined Hewlett Packard to announce a 3Gb per side alternative. The competing scheme, the original DVD+RW, has now been renamed phase-change rewritable, which is unlikely to win any prizes in a snappy name contest.

DVD+RW now refers to the technology and the drive, and indicates a drive that can read DVD-Rom (but not DVD-Ram) discs, as well as read and write.

The first round of DVD-Ram drives are available now and offer 2.6Gb per side. Second-generation DVD-Ram drives with 4.7Gb per side are slated for 1999.

Sony has demonstrated a prototype DVD+RW drive and projects a 1998 shipping date. According to Sony, second-generation DVD+RW drives will offer 4.7Gb per side, but there is no shipping date as yet.