Studio pix offer competition to DVD format

Fox, Universal, DreamWorks and Artisan Wednesday will announce the release of the first high-definition movies for the homevideo market -- but they won't be on DVD.

Using an advanced video technology similar to High Definition TV (HDTV), the studios are turning back to a format that appeared to be losing favor with consumers: the VHS videocassette.

The four companies will begin rolling out a slate of high-definition movies on videocassette in June based on the new Digital-VHS (D-VHS) format, developed by hardware maker JVC, which can also record HDTV signals from TV broadcasts.

Among the first pictures will be ``Independence Day,'' ``Die Hard'' and ``X-Men'' from Fox; ``U-571'' from Universal; and the first two ``Terminator'' movies from Artisan.

Broadcasters have been dragging their feet on HDTV. For some of the vertically integrated film studios that have ties to broadcast concerns, this will boost that fledgling market. At the very least, the new D-VHS addresses a niche market that they believe will grow, while offering consumers a new machine that still will play their existing library of videos.

The news is already sparking controversy at other studios. Execs are worried that a new digital homevideo format will confuse consumers just as the DVD market is exploding. That could slow sales of the fastest-selling consumer electronics product ever. D-VHS offers more than twice the picture resolution of DVD.

DVD proponents dismiss any perceived advantages to D-VHS as being short-term and not significant enough to overcome the inherent disadvantages of tape-based formats.

``D-VHS suffers from all the limitations inherited from a tape-based format, such as random access, additional languages, enhanced content, all the things that have made DVD such a popular format for consumers,'' said Marsha King, executive VP of new business development and business affairs at Warner Home Video.

Recording TV programs will be no easier than with any other VCR, said WHV president Warren Lieberfarb. ``(Digital video recorders) such as TiVo have already leapfrogged tape-based time-shifting, so D-VHS is already obsolete even before it arrives.''

Warner Home Video does not plan to release movies in D-VHS. Neither does Sony's Columbia TriStar Home Entertainment.

``As far as we're concerned, D-VHS is not a commercial product,'' Columbia TriStar president Ben Feingold said. ``The enormous success of DVD leads us to believe, both intuitively and practically, that there's a strong preference for a disc-based product.''

But D-VHS supporters see no conflict between the formats.

``This is really incremental technology, addressing a relatively small niche,'' Artisan Home Entertainment president Steve Beeks said. ``I don't really think it will have any impact on the DVD market.''

Others stress that even D-VHS supporters have no interest in undermining the DVD biz.

``We love DVD,'' said Patricia Wyatt, president of Fox Consumer Products. ``It's the golden goose. This (D-VHS) is directly targeted at the HD household. Those people are the most avid consumers of entertainment, and I think they'll continue buying DVDs as well as D-VHS.''

Although both D-VHS and DVDs store movies digitally, D-VHS can pack far more data onto a standard-size tape than can fit on DVDs. DVDs are capable of better picture quality than standard VHS, but they can't store high-def images.

High-def DVD technology is still five to seven years off, according to studio execs who have been briefed on it. That leaves the field open for D-VHS as the only format capable of recording and playing back high-def content.

D-VHS actually records at a higher bit-rate than the U.S. HDTV standard, producing even higher quality images than HDTV broadcasts.

The new format is the brainchild of JVC, which developed the original, analog VHS format that is being overtaken by DVD. The new format uses the same size cassettes and many of the same mechanical features as the original, and the new players are compatible with older VHS cassettes.

The machines have been available in limited numbers from JVC and Mitsubishi for two years, primarily as a home recording format for HDTV broadcast and satellite signals.

Although JVC has been talking to Hollywood about movies to support the format since its introduction, the studios were reluctant to release anything in high-def until adequate copy protection encryption could be developed, particularly in the wake of widespread hacking of DVDs.

At the Consumer Electronics Show in Las Vegas earlier this month, JVC bowed its D-Theater copy-protection system, which it claims is superior to the Content Scrambling System used on DVDs.

Only D-VHS players equipped with the new D-Theater circuitry will be able to play movies in high-def. Earlier machines, without the system, will play older VHS cassettes but can't decode encrypted high-def cassettes.

The market for high-def movies is likely to be tiny at first. The number of households with HDTV sets in the U.S. stands at about 2 million and is projected to reach 4 million by 2003.

JVC is hoping to sell 100,000 D-VHS players within the first year, according to consumer video division VP Jerry Barbera. JVC has only one model on the market, priced at $1,995, but plans to bow at least one more this year. (Copyright By Paul Sweeting)