1999: The Year Of DVD?

Even a die-hard pessimist would have trouble finding a cloud around this silver lining.

Digital video disk or DVD, the high-quality video and audio format, took off this Christmas, driving at least one online retailer's holiday sales.

"The big surprise for us this Christmas was DVD," said Julie Wainwright, CEO and founder of online video seller Reel.com. The share of movie sales in the DVD format jumped from 10 percent in September to 36 percent so far this month.

Amazon.com, which has taken up selling videos and DVD movies, would not give out any numbers for the Christmas season. It's rental partner, NetFlix.com, could not be reached for comment.

Yet, to Reel.com, there is no doubt. "I think 1999 is going to be the year of DVD," said Wainwright.

She's not alone.

PC to drive DVD?
John Freeman, president of storage-technology watcher Strategic Marketing Decisions Inc., believes sales of both consumer-focused DVD players and PC-targeted DVD-ROM drives will go ballistic in 1999.

While Freeman forecasts DVD player sales jumping from 1.5 million this year to between 3 million and 5 million players in 1999, the analyst believes that DVD-ROM-equipped PCs are driving the market.

"I think we are almost crossing the threshold where DVD-ROM is taking over the PC platform base," said Freeman. "By the second half of next year, every PC greater than $800 will be equipped with DVD." His estimate: More than 30 million PCs will be sold in 1999 with a DVD drive.

Divx disappears?
Another possible reason for the jump in interest is the obvious lead that DVD has over the competing format, Divx.

While over 2,500 movies have been converted to DVD format, only 250 Divx movies are currently offered. "We have never had one request for Divx," said Reel.com's Wainwright, "while the demand for DVD has been insatiable."

Indeed, there is an excitement surrounding the format.

Many of Reel.com's customers were buying DVDs even though they had no player yet. "People were buying in the hope, or the expectation, that they were getting a player for Christmas," said Wainwright.

Reel.com has already modified its business plan once. It may be time to do it again, she said. "Looking out six months, I can easily see DVD being 50 percent of our business."

See Also:
Intel's intent: a DVD in every PC
The truth about DVD
Going after DVD bootleggers
Gateway will chop DVD's cost

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