To produce DVD players, one needs to license a range of patents, owned by different companies. A number of these companies (Philips, Sony, Matsushita and Toshiba) have decided to license the necessary patents through one licensing agent. Philips has been selected to take up this administrative role.


1.4 What DVD products are to be expected?
The most emphasized DVD product and the first CE-product in a range of DVD applications is DVD-Video. This is basically a player and disc system specified to deliver linear video content (like movies). It is a relatively affordable consumer appliance similar in concept to Audio CD and Video CD. It is expected that further functionality such as interactivity and Internet access will be added. Recordability will become mainstream after the turn of the century. Philips' DVD-Video players will be produced and marketed by the Business Line DVD, part of Sound & Vision Of equal importance is DVD-ROM, a disc format specification for computer applications just like CD-ROM. Within Philips, DVD-ROM drives are the business of the Philips Key Modules group.


1.5 What is the status of the DVD Audio specification?
The DVD Consortium has decided to seek additional input from the music industry before defining the DVD-Audio format. Quotes from some manufacturers indicate an odd separation of DVD-Video and DVD-Audio. The Consortium is studying the various "wish lists" of the concerning industries and hopes to finalize the audio DVD specifications early 1997.


1.6 Will there be a recordable DVD?
A real time DVD movie recorder is not to be expected within 5 years from now because of the multi-pass nature of variable bit rate recording, and the authoring and multiplexing required. A simplified, fixed bit rate, linear video DVD recorder could be made, but even with MPEG1 encoding it would probably cost over ten thousand dollars for the next years. .A recordable DVD (write once, not erasable) has been developed and demonstrated as a prototype. It may be available as a product end '97 for data application but not at a consumer price level. (Pioneer announced a DVD-WO at a price of $10.000). The systems needed to create MPEG2 compressed video found on DVD Movie discs can cost upwards of $250.000 and take several hours and multiple passes to compress one movie. The term "recorder" is misleading. It will probably be a data recorder, not a VCR-like video recorder, most commonly used as computer data recorders for DVD-ROM discs.


1.7 What about the availability of software for DVD-Video?
Time Warner, Sony (Columbia/Tristar), MCA, MGM and Turner have announced intentions to release movies on DVD. Disney, Fox and Paramount have not comitted publicly yet because of the issues of copyright protection. The expectation is that they will follow soon. The actual number of titles depends on the general market uptake and the steepness of the learning curve of the encoding process. Software will be available because DVD-Video is in the content-indus try’s interest. For the content industry DVD is a new format to exploit existing and new Intellectual Property Rights. The sell-through business is very important for film studios since it makes up roughly 40% of their revenues. The advantages of disc (cheap medium for distribution and reproduction) will increase the packaged video sales. First DVD-ROM titles will also begin appearing in late 1996. Two announced titles are "Phone Disc Power Finder USA One", a US Phone Directory and "Silent Steel" a computer game on DVD-ROM. As of August 1996, 30 DVD-ROM titles are in development for early 1997 release. Approximately 40% of CD-ROM producers have announced intentions to develop for DVD-ROM.


1.8 What are the DVD-Video system features?
· full length movie on one single disc
· cinema picture quality
· digital multichannel sound
· multiple aspect ratios
· parental lock
· plays also audio CD and videoCD
· up to 8 audio tracks for different languages
· subtitles up to 32 languages
· optional regional coding
· optional copy protection


1.9 Do I need a Widescreen TV to play 16:9 movies?
A DVD-player can be connected to any television, but with a Widescreen TV you will get the most out of it. With DVD-Video you can gradually build up your own Home Cinema system with Widescreen TV and multichannel digital surround sound. DVD-Video supports multiple aspect ratios. Video stored on a DVD in 16:9 format is horizontally squeezed to a 4:3 (standard TV) ratio. On Wide-screen TVs, the squeezed image is enlarged by the TV to an aspect ratio of 16:9. DVD video players output widescreen video in three different ways:
· letterbox (for 4:3 screens)
· pan & scan (for 4:3 screens)
· anamorphic or unchanged (for wide screens)
In widescreen or letterbox mode if a movie is wider than 16:9 (and most are), additional thin black bars will be added to the top and bottom at production time or the sides will be cropped. Video stored in 4:3 format is not changed by the player. It will appear normally on a 4:3 screen. Widescreen systems will either stretch it horizontally or add black bars to the sides.


1.10 What are "regional codes"?
Motion picture studios want to control the home release of movies in different countries because theater releases aren’t simultaneous (a movie may come out on DVD in the US when it’s just hitting screens in Europe). Therefore they have required that the DVD standard include codes which can be used to lock out the playback of certain discs in certain geographical regions. Players sold in each region will have that region’s code built into the player. The player will refuse to play these "region coded" discs which are not allowed in the region. However, regional codes are entirely optional. Discs without codes will play on any player in any country. Some studios have already announced that only their new releases will have regional codes. There are six regions:
1. United States and Canada
2. Europe and Japan
3. Far East (except Japan & China)
4. South America
5. Africa and the Middle East
6. China


1.11 What are the copy protection issues?
There are two forms of copy protection specified by the DVD standard:

• 1. Analog copying (from disc to tape) is prevented with a Macrovision circuit in every player, this will confuse the automatic-recording-level circuitry of VCRs.
  
• 2. Digital copying is controlled by information on each disc specifying how many times (if any) the data can be copied. This is a "serial' copy management scheme designed to prevent copies of copies. The accepted solution is based on encryption of the film content of the disc. Thisbasically means that a specific decryption technology is required inthe player to deliver an undisturbed clear picture. Philips is pleased that there is an agreement now between all the different industries on copy protection. This was the last open issue with respect to the DVD-Video format. We can go ahead now with our introduction plans.

1.12 How much do discs cost?
The price of discs vary, depending on wether they concern special editions with supplemental material (which cost much more to produce) new releases (initially be priced around $80 for rental, but increasingly most videotapes are released immediately for sell-through.) or existing titles. The latter category of back-catalogue titles has already made money and titles are expected to be priced below $25 on DVD. Announcements so far indicate that prices will be about the same as full price video tapes.


1.13 What will be the price of a DVD-Video player?
DVD-Video retail price announcements vary between $600 and $1600. The typical pricepoint is between $700 and $800. The exception is Pioneer who announced a combi-player with build-in laserdisc drive for $1750. The expectation is that prices will come down rapidly.


2.1 Is DVD-Video compatible with CD audio (CD-DA)?
Yes. All DVD players and drives will read CDs. This is not actually required by the DVD hardware specification, but all manufacturers have stated that their DVD hardware will read CDs. On the other hand, you can’t play a DVD in a CD player.


2.2 Is DVD-Video compatible with VideoCD?
It's not required by the DVD specification, but most manufacturers have announced that their DVD players will play VideoCDs. With the exception of the first basic model for the US, all Philips DVD-Video players will be Video CD compatible


2.3 Is DVD compatible with CD-i?
In general, no. It’s not required by the DVD specification and therefore the manufacturer’s choice. DVD-Video and CDi are two distinctly different functions serving different market segments. Philips will continue to sell CDi products. A standard DVD-Video player is not compatible with CDi. For those countries with CDi interest, Philips is looking at business opportunities for a DVD-Video - CDi combi product. No exact launch date has been set yet however.


2.4 Is DVD-Video compatible with Photo-CD?
Not necessarily. PhotoCDs are usually on CD-R media, which are "invisible" to the wavelength of the laser required by DVD. It is the manufacturers choice to offer a compatible solution eg with two lasers.


2.5 Will DVD-Video replace VCR?
Not in the near future. Recordability is expected to become mainstream after the turn of the century and Prices are far from VCR level. Besides this, we don't regard DVD-Video primarily as a potential replacement of the VCR; there are other functionalities of DVD-Video that would attract buyers, maybe not directly as a replacement of the VCR but possibly reducing the replacement speed of old VCRs with new VCRs


2.6 Will DVD-Video replace Laserdisc?
Probably yes, but it will take some time. Although Laserdisc is established as a videophile format, it is the only one, with a world-wide household penetration of less than one percent. There are over 9000 laserdisc titles in the US and even more in Japan. It will take DVD-Video some years but it will definitely reach this point. According to the current market predictions, the installed base of DVD will exceed the installed base of Laserdisc players soon. Anticipation of DVD is already hurting laserdisc; in 1996 laserdisc sales were down 36%.


2.7 How does DVD-Video compare to Laserdisc?
DVD-Video has the same basic features as laserdisc (scan, slow, still, search) but adds some limited interactive features like multiple camera angles, video menus, etc.. DVD has the same size, look and feel, durability and ease of use as the CD and is therefore more convenient than the laserdisc. Laserdisc has surround audio in AC-3 format. DVD supports AC3 (for NTSC countries) and MPEG digital audio (for PAL countries), but can actually go to a higher data rate for better quality (448 Kb/s instead of 384). DVD has the potential for better video, provided that it's carefully encoded.


2.8 Will DVD-Video replace VideoCD?
Probably yes. It is to be expected that Video CD will eventually be replaced by DVD-Video because of the superior A/V quality and future proofness of DVD-Video. Like Laserdisc, Video CD never succeeded to be accepted by the consumer mass market. Exceptions are Japan, were VideoCD became popular in the Karaoke market and China, where VideoCD is growing rapidly. But the worldwide household penetration of VideoCD players is less than 1%. Because of the playability of Video CD titles on PC, there is a reasonable amount of Video CD titles available (about 5000). Consumers who have already invested in a VideoCD title collection might buy DVD-Video as replacement for their VideoCD player or to play their titles also on TV in addition to PC.