MGM is re-releasing two animated titles on DVD this month: How The Grinch Stole Christmas and Horton Hears A Who. © 1997 MGM Home Entertainment.

The happy industry statistics promise the holy grail of all new formats: an economy of scale. A report by Wall Street analyst Sanford Berenstein & Company, summarized in Video Business Magazine, speaks glowingly of "early adopters" of new technology. They predict that those videophiles who thrill to the "latest, greatest thing" will spring to the fore and latch on to the quality of this new medium. It also spoke of an increase of as much as ten points in the stocks of major studios due to this new revenue stream.

This is only one in many hyper-optimistic reports. Time-Warner is predicting that ten million DVD video players will be sold in the U.S. in the next five years; C-Cube estimates that there will be one million DVD players and drives by the end of 1997; and Infotech projects 840,000 DVD video players will be sold in the first year. Though industry figures on numbers are an arcane science to say the least, industry watchers are dubious. "I don't know where they're getting these numbers from," said one industry analyst, declining to be named.

Perhaps a good test of these prognostications might be their own prediction for the number of software units that will be sold in 1998: it stands at 36.7 million. VideoScan, an independent industry organization which tallies sales of DVD software, said that only 382,000 units had been sold through September 15, 1997. Even given a wonderful Christmas, the industry will be hard-pressed to go through an almost hundred-fold increase in 15 months.

In all fairness, there may be surprises. VideoScan monitors only the numbers from retail outlets, not such non-traditional sources as mail-order houses. Could it be that pornography will lift this business in the same way that it boosted the VHS market?

The greatest danger to the DVD standard is likely to be created by the industry itself: hype, and its evil twin, disappointment. "I think DVD will have almost zero impact in any area this Christmas," worries developer Kathy Kozel, "and that may really knock out DVD ROM."

Stage Six: Upgrade Or Die, The Coming Of DVD ROM
You foot draggers out there who moan with each computer upgrade you're forced into should get plenty of angst over whether to budget for a DVD ROM in the coming year or two. Described as basically a large CD ROM, DVD ROM uses formatting and layering techniques to deliver vast amounts more information on a CD sized disc. Let's make it simple: wait.

At first it seemed that the good news for consumers was that the bewildering array of video accelerator and sound cards, faster central processing units, and various compression engines have reached a plateau with the Pentium 2, MPEG2 video compression and A3 audio standards. However, let's not cheer too soon.