DVD-Audio Launch Pushed Back To Summer Or Fall At Earliest

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The launch of DVD-Audio players and software will be pushed back from spring 2000 to the late summer or fall at the earliest while the music industry and the DVD Forum's 4C entity reassess the effectiveness of the format's encryption system, music industry executives told TWICE.

The reassessment follows the hacking of the DVD-Video format's Content Scrambling System (CSS) by a Norwegian hacker who used a PC and DVD-ROM drive. The DVD-Audio format incorporates a CSS variant called CSS2 as well another copyright-protection technologies, including watermarking

The delay could make for a slightly wider software and hardware selection at launch time, DVD-A supporters said. The music industry, for example, will continue to mix and author DVD-A discs while CSS2 is reevaluated, said Jordan Rost, Warner Music's senior VP of new technology. "Encryption is done at the last stage, so title development - mixing and authoring - is not impacted, just manufacturing [of discs]," he explained. In the authoring process, music, menus, and value-added material such as lyrics and video clips are transferred to a master disc used in disc manufacturing.

The delay, however, will also give the Super Audio CD (SACD) format "an extended window to build its validity and infrastructure" and "aid in a little more rapid awareness and acceptance," said Mike Fidler, Sony's senior marketing VP. By the time DVD-Audio launches, multichannel SACD players might also be available. Philips has said it expected multichannel SACD players to become available worldwide as early as mid-2000 from its Marantz unit.

The DVD-A delay also makes it possible for other companies to join Sony in shipping SACD players before DVD-A players are available. Marantz and at least one other company, for example, plan U.S. SACD shipments in 2000. Nonetheless, the DVD-A delay will also reduce potential SACD player availability because planned combination SACD/DVD-AV players will also be delayed. Pioneer plans such a combination unit, which would play two-channel SACD discs, and companies such as Denon have also indicated a desire to make a combination player. Earlier this year, Philips said it planned third-quarter 2000 shipments of a combination unit but, citing DVD-A authoring equipment delays, intends instead to ship an SACD/DVD-Video player during that time.

In comparing a delayed DVD-A launch with the aborted spring launch, Warner's Rost said the potential now is for "a significant number more" software titles to support the hardware launch. He projects software availability in the fall at the earliest, and at that time, "a stronger array" of titles and a "more aggressive launch of hardware" is more likely than it would have been in the spring, when Warner would "probably" have had about a dozen titles available, he noted.

Music company BMG Entertainment likewise "had planned 12-plus titles for the spring," said Kevin Conroy, senior VP of worldwide marketing, "and my expectation, if we use the time effectively, is we hope to have more." BMG, he added, "is shooting for summer releases," but fall "is probably more realistic."

Software production has been held back by a lack of software authoring tools. "Authoring tools are still in beta, so we haven't been in a position to ramp up to quantity production," Rost said." We are authoring with one-of-a-kind [beta] authoring tools." The lack of new multichannel recording equipment means that, at least for Warner, most of the first tiles will be multitrack library material that will be remixed for the new format, he added.

As for the hardware on which to play the material, Kenwood and Pioneer spokespeople said they has been targeting spring launches before the delay; Denon said it had been considering a first-quarter launch; and Panasonic/Technics was targeting late-1999 to early 2000. Now, Pioneer said it expects its two DVD-A/V players, both with progressive video outputs, to be available sometime in 2000. Denon and Kenwood aren't offering projections.

Panasonic/Technics said it would postpone its U.S. launch "approximately six months" to mid-2000 but would continue to promote demonstrations at retail, said audio group GM Gene Kelsey. Demo units have been placed in about 200 outlets in such chains as Tweeter, Harvey, and Ultimate. The company's format-promoting consumer ads will continue to appear "for the balance of their schedule" through mid-February, he said, and the company hasn't decided whether to extend the ad campaign, he said.

JVC has delayed its planned December launch in Japan, but Pioneer will go ahead this month with Japan shipments of players that lack decryption circuitry because of built-up consumer expectations, the company said. Because encryption is optional on discs, Pioneer said it would supply unencrypted discs to support the hardware launch and expected other software makers to do so. Pioneer will later upgrade the players at no cost to consumers to include whatever encryption technology is approved.

Ultimately, the music industry and the 4C could opt to keep CSS2, said Bill Allen, BMG's director of new media technology. "CSS2 is an updated version of CSS, and by itself, it might be good enough. Therefore, we might not have to change, and we could make the six-month goal," he said. On the other hand, "if there is a need for an alternative, we'll go that track, but I don't know if that will push us past six months if an alternative technology is ready to go."

If a new technology is needed, Rost said, and there is "quick agreement" on a new technology, it could take two to three months to create a new chip design and another two to three months to begin manufacturing the chip. "At best," he said, that means a fall software launch.

According to BMG's Conroy, "the judgment of the 4C was that six months should do it."

Conroy also pointed out that BMG hasn't asked hardware suppliers to delay their shipments. "As soon as we became aware of the issue, there was a flurry of phone calls to establish a dialog and decide how we'd deal with it." For BMG's part, "We made our own decision on what we would do."

The encryption system hack is more alarming for music companies than movie companies, one music industry executive said, because audio files are much smaller than a movie file. "Fitting a song on a hard drive is a lot easier because song files are three to four minutes compared to a two-hour movie (that would eat up almost all space on most of today's hard drives)." A Pioneer spokesman also noted that illegal duplication of movies isn't commercially viable because recordable DVD discs cost about $30, the same price or more than prerecorded DVD movie discs.


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