Endangered species ?

With plummeting prices and nifty features, DVD may replace your VCR and

If change is good, these are great times for America's living rooms and home offices. Technology is about to sweep in the new and push out many of today's familiar machines.

That sweet-sounding compact-disc player? Sorry, it looks endangered. The trusty videocassette recorder? Uh-uh. And you might as well wave goodbye to the CD-ROM drive in your computer, too.

Sooner or later, they'll all be replaced by ... well, no one's quite sure. In the new environment, audio systems may sprout monitors; computers could become entertainment centers; keyboards could become standard for tomorrow's TV sets.

What is clear is that the first wave of these new machines will use a medium called digital versatile disc or DVD. If you've roamed a video-rental or computer store lately, you've probably seen one. It looks like a two-sided compact disc but holds seven times as much information and pumps out clearer music and better video.

It will allow consumers to use the same disc in their computers, video players, and audio systems. That versatility may persuade people to simplify their lives and use a single device, such as a computer, to watch movies, search the Internet, or listen to a symphony.

But more likely, industry experts say, they'll stock up on even more gadgets to take advantage of DVD quality: wide-screen TV sets hooked to DVD video players, high-end digital audio players - and other machines not yet invented. "There are going to be lots of new devices that we can't picture quite yet," says Ross Rubin, senior research officer with Jupiter Communications, a technology market-research firm in New York. But "I think it would be an evolution of things you see today."

Consumers flock to DVD

So far, DVD has made its greatest splash in video. Last year, in only its second year on store shelves, consumers snapped up 1 million DVD players - an important gauge of success in the consumer-electronics business. And DVD video players reached the 1 million mark faster than the highly successful VCRs or CD players when they first were introduced.

"That's really taking off," says Jim Barry, spokesman for the Consumer Electronics Manufacturers Association. "We'll probably see 2 million this year." They are also becoming more affordable: Some DVD machines now sell below $300.

Consumers are flocking to DVD because it represents a huge leap in quality. The picture is much sharper than a videocassette's. The sound is clearer, too, and more suited to the surround-sound home theaters that homeowners are installing with increasing frequency.

"Some movies, you say, 'I just have to see that on DVD,' " says Matt Thompson, a technology enthusiast and new DVD convert in Alton, Ill. He recently watched a western. "Some of the footage was so clear it really felt you were in the editing room watching the first [film] print."

The technology offers other advantages. DVD players will play CDs. And because the disc stores data the way a computer does (in 1s and 0s), viewers can jump to a specific scene in a movie. DVD discs usually carry other data as well: production notes, subtitles in various languages, even dubbing and different formats for the film. So if you want to watch your favorite flick in the wide-screen version in French, a DVD player will let you do it.

DVDs also reproduces music much more faithfully. That's partly because they can handle six channels of sound, rather than the usual two, and partly because it's better quality. CDs capture sound by taking "snapshots" of music thousands of times a second. But for years, high-end audiophiles have complained that CDs lacked the warmth and detail of traditional vinyl records.

A DVD adds more detail because it takes four snapshots in the time that a CD takes one. Also, each DVD snapshot is 50 percent sharper than a CD.

The new discs are also making rapid inroads into the computer world. This year, 17 percent of computers sold worldwide will come equipped with a DVD drive, estimates Wolfgang Schlichting, a research manager for International Data Corp. That's remarkable growth for a technology that's only a little over a year old. And by 2001, they'll have grabbed half the market away from CD-ROM drives, he forecasts.

It plays, but can it record?

The technology's next big step is recordability. The computer world leads the way. Three manufacturers are already selling DVD drives that can record as well as play back data. But the discs' capacity is limited, and Mr. Schlichting says recordable DVDs will remain a niche product in the computer industry for the next few years.

Earlier this year, audio DVDs notched an important victory. Four technology companies and five large music companies agreed on how to protect the music on recordable audio DVDs. Agreement was crucial because record companies would not release material on DVD if consumers and pirates could make thousands of free copies.

Instead, the new agreement (known as DVD Audio) will allow consumers to make a single copy of the DVD music disc they buy. That copy will be CD quality, not DVD. But the standard is flexible enough that music companies can engineer discs to allow more than one recording. Companies can even vary permission by song and, if they choose, change those instructions online. That way consumers will be able to buy a DVD disc, listen to it, and authorize an online payment that automatically unlocks more music on the disc.

'The most significant change in 50 years'

"It's going to open up a whole new way of marketing music," says John Hoy, director of strategic alliances for Toshiba America Inc., one of two consumer-electronics companies to agree to the standard.

Companies hope to begin selling the new DVD Audio machines this fall. "The Christmas season should be a DVD Audio Christmas season," says Alan Bell, program director of digital media standards for IBM, the computer giant based in Armonk, N.Y.

The technology could transform the music business. "You have to think of this as a whole new generation of audio experience," says Paul Vidich, an executive vice president at Warner Music Group. Because the discs can hold text and video as well as sound, music companies may include liner notes on the disc, interactive games, or even music videos along with the music they sell.

"I think the industry is going through the most significant change it has seen in 50 years," Mr. Vidich adds. "It's creating an enormous number of opportunities for us."

But no one knows yet what those opportunities will be. Will the gadgets replacing today's VCR link up to the Internet? Will tomorrow's computer look and act like an entertainment system? And will all these gadgets stand alone in the American living room circa 2010 or get integrated into a home network?

"The answer is all of the above," says Robert Finger, director of technology for the technology center of Matsushita Electric Corporation of America in Secaucus, N.J. (Matsushita owns Panasonic and Technics.) The first products will be players that can handle both video and audio DVDs; later the industry will branch out into high-quality audio-only players and portable DVD players.

The future of America's living rooms

Despite its quick progress, DVD faces challenges. On the audio side, Sony and Philips have banded together to create a rival high-end disc called Super Audio CD. On the video side, some companies are pushing a popular technology called Divx for video rentals. The system allows consumers to rent a DVD movie and never return the disc. (It won't play 48 hours after it's first played.) But if consumers want to rent longer or buy the disc, they can pay to use the Divx player to unlock the material.

Divx doesn't represent a true rivalry because its players accept DVD discs. The catch is that regular DVD players won't play Divx discs.

On the computer side of the business, a number of competitors could give recordable DVDs a run for their money. But the biggest threat to DVD is the future.

"There's some danger that the format is going to get squeezed because while it is a step above VHS [videocassettes] in terms of quality, it is certainly a major step below what high-definition television is capable of," says Mr. Rubin of Jupiter Communications.

As that technology takes hold in a few years, DVD will have to get even bigger to keep up with technology's rock 'n' roll transformation of America's living rooms.

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