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Panasonic: OEM DVD-Audio To Gain In ’05 Models

New York – Additional automakers are expected to launch OEM DVD-Audio in the 2005 model year, following Acura’s launch this month of the U.S. market’s first OEM DVD-Audio player in the 2004 Acura TL, according to Thomas Dunn, business manager for Panasonic’s Michigan-based OEM unit.

The Acura TL is the first U.S.-market car to offer DVD-Audio and the first in the world to offer the format as standard equipment, he said at a press event held during the Audio Engineering Society (AES) convention here. Panasonic manufactures the six-disc double-DIN DVD-Audio head unit, but the complete audio system was designed in collaboration with Grammy-winning producer/engineer Elliot Scheiner. The system is branded with the ‘ELS Surround’ name after Scheiner’s industry recognized ‘ELS’ brand.

‘I think Acura will have the stage to themselves for the ’04 model year,’ he told TWICE, but in 2005, ‘I expect several introductions from domestic, European, and Japanese automakers.’

‘All majors have heard our demos and are actively planning to introduce DVD-Audio,’ he added. ‘DVD-Audio is in all of their product plans,’ he claimed.

The automakers are gravitating toward DVD-Audio, he contended, for several reasons, including the availability of automotive-grade DVD mechanisms in vehicles since 1997, initially in navigation systems. That’s led to robust mechanisms and economies of scale, he said. Consumer awareness of DVD has also caught automaker’s attention, as has ‘wide support’ of the technology from music companies, he said.

Underscoring that support, EMI Music [formerly EMI Recorded Music] recently decided to throw its full weight behind DVD-Audio, making it the ‘de facto format’ for all of the company’s labels, said Ted Cohen, senior VP at EMI Music. EMI labels have offered a mix of DVD-Audio and SACD titles in the past, but in the future will offer SACD ‘only in special circumstances, such as an artist’s insistence, he told TWICE after the press event. EMI’s labels include Virgin, which has almost exclusively marketed SACD titles. EMI sells about 50 DVD-Audio titles in the U.S., Cohen said.

All told, the selection of DVD-Audio titles in the U.S. is about 460-470, and the number will grow to more than 500 by year’s end, said Panasonic entertainment group VP Reid Sullivan.

With EMI’s announcement, three of the five major music companies are firmly in the DVD-Audio camp: Warner, BMG, and EMI. Universal offers both DVD-Audio and SACD, which Sony Music supports exclusively. Among independent labels, 5.1 Entertainment Group supports DVD-Audio exclusively.

Recent software price reductions will also help stimulate sales, Sullivan and Cohen said. Warner prices most of its DVD-Audio discs at CD prices, and earlier this year, 5.1 Entertainment dropped its DVD-Audio prices from about $24.98 to $17.98, closer to its CD prices of $13.98-$17.98.

Universal shipped its first DVD-Audio discs in September at a suggested $18.98. EMI’s DVD-Audio prices, however, are still about $22.

A rapidly expanding installed base of DVD-Audio players will also help stimulate software sales, Sullivan said. ‘About 100 DVD-Audio units are available from 37 manufacturers in the U.S. at prices from $129 to several thousand dollars,’ Sullivan said, referring to DVD-Audio-equipped DVD players and HTiB systems. From April through August, he noted in citing NPD statistics, three of the five best-selling HTiBs at retail in units and dollars were Panasonic models with DVD-Audio.

‘As you go up in our line, consumers are asking about DVD-Audio,’ he added.