BUENA VISTA TO SPIN OUT DVD FOR CHRISTMAS

DAN ALAIMO

BURBANK, Calif. -- The new digital videodisc format may have passed its last major obstacle this month as Disney's video arm, Buena Vista Home Entertainment, said it would support the fledgling technology with a slate of live-action titles later this year.

"We've carefully scrutinized the development of this new format at every turn and we're impressed with the strides that have been made in both technology and security," said Michael O. Johnson, president of Buena Vista Home Entertainment Worldwide, in a press statement.

"We believe the timing is right to now offer Disney's endorsement to this revolutionary format, which provides the highest quality, most advanced in-home entertainment experience. We're confident that our support of this technology will help foster its growth and consumer acceptance," said Johnson.

With Disney in the DVD game, there are now only two holdouts among the major studios: Paramount Home Video, Hollywood; and Twentieth Century Fox Home Entertainment, Beverly Hills, Calif. An official at FoxVideo, Los Angeles, said, "We are not participating in DVD at this time," and would make no further comment. Paramount did not return a phone call for comment.

Of the other studios, Warner Home Video, Burbank, Calif., has been the most ardent supporter of the new format, with president Warren Lieberfarb leading the charge. "Disney's entrance into the DVD market ensures the success of the next generation of home video," he was quoted as saying. Warner is rolling out its DVD products nationally this month, but only for the sell-through market.

Sony-owned Columbia TriStar Home Video, Culver City, Calif., also is a major proponent of DVD, but an official would not comment on Disney's entry into the format. Other major supporters are MGM Home Entertainment, Santa Monica, Calif., which has a distribution agreement with Warner; New Line Home Video, Los Angeles; and HBO Home Video, New York, both of which are owned by Warner. PolyGram Video, New York, which has been making significant inroads into the theatrical movie market, also is firmly behind DVD and it is the only company to back it with a kiosk-based rental program. Universal Studios Home Video, Universal City, Calif., announced its support of the format during last summer's Video Software Dealers Association convention in Las Vegas.

In a related move, video distributor Ingram Entertainment, La Vergne, Tenn., announced a kiosk-based rental program last month as well.

Most supermarket video executives are monitoring the growth of the DVD business closely. Some, like Schnuck Markets, St. Louis, have already jumped in with a major DVD program, while others are taking in kiosk programs like those from PolyGram and Ingram. But it will probably be next year at the earliest before DVD is accepted by enough consumers to make it a viable item for supermarkets, industry observers said.

But Disney's embracing of DVD is seen by many in the video industry as a watershed decision in the development of DVD, even though it will not initially release its best-selling animated features on the format. The studio has about 10 live-action titles ready for DVD release before Christmas, Johnson said. Conversion of the animated titles takes more time and will follow at some point in the future, he said. Disney also will not issue new release movies at the same time as videocassettes.

Among the DVD titles said by industry analysts to be in the works from Disney are: "The Santa Clause," "The Crow," "Pulp Fiction" and "The Rock." Presumably the initial focus on catalog items means sell-through price points in the $20 to $30 range like the other studios. But Johnson said Disney will release its pricing plan for DVD in a few weeks. After the initial release, Disney will issue four or five titles a month.

Buena Vista is the leading studio in the home video business with more than 30% of the industry's $8 billion-plus wholesale revenues last year, according to Adams Media Research, Carmel Valley, Calif. In sell-through, the company has 36% of the nearly $6 billion market at wholesale.

Nearly 150,000 DVD hardware units have been sold since they debuted last March in seven markets. It has been estimated that some 400 DVD titles will be available by the end of 1997.