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PC DVDs have a way to go

PCs with DVD-ROM drives were supposed to be all the rage. Yet the potential of the next-generation storage devices remains largely unfulfilled.

PCs with DVD-ROM drives were supposed to be all the rage by now, creating a new market for titles and driving sales of even more PCs.

Yet the potential of the next-generation storage devices still remains largely unfulfilled with both logistical problems and the slow arrival of titles delaying introduction of DVD-equipped PCs until at least May and possibly longer.

Personal computers with DVD-ROM drives from companies such as Compaq Computer (CPQ), Toshiba, and Sony (SNE) will be able to play full-length movies with high-quality video and audio, sophisticated games, and multimedia content far beyond the capabilities of today's CD-ROM drives.

Standalone DVD players that attach to televisions are also available to play movies with subtitles in different languages, add parental ratings controls, or provide control over frame viewing angles.

But the DVD market won't really take off until the makers of the popular consumer PCs build the new drives into their systems and a number of factors are persuading these vendors to hold back.

First, the copyright protection issue that delayed the initial launch of the drives last year is still a problem, according to Ted Pine, president of InfoTech, a market research firm.

A consortium of manufacturers and entertainment companies had agreed in October how content would be encoded during disc production, in addition to a method for unscrambling the signal during playback. The companies hoped this would thwart efforts to illegally copy material. But licenses for the technology are hard to obtain.

"There has been a mechanism [for decoding material] approved. It's been difficult to get licenses from Matsushita to take that copy protection code and incorporate it either into a silicon solution or software decoder solution," Pine said.

And companies discovered that even once they had licensed the technology, the Japanese government was reluctant to sign off on the deal because it doesn't want to let companies export any encryption technology, Pine added.

Even aside from these political problems, title developers have been slow to throw themselves into production. Although the new drives will be able to read CD-ROMs, titles that take full advantage of the medium's capabilities probably won't begin to appear until late 1997 or early 1998. Currently, there are approximately 24 DVD-ROM titles, according to Pine, as well as a number of movie titles.

"Unless content providers can see a business opportunity, it's not going to happen. We're ready [with the drives]; we're just looking at the software market," said Tac Sugiyama, director of marketing for Sony Information Technology of America, the division that sells PCs and peripherals.

With all these other factors making the DVD market look like a slow starter, PC manufacturers aren't sure how quickly they can bring down the cost of including the drives in systems.

For now, users wanting to purchase DVD-ROM upgrade kits are able to buy from companies such as Creative Labs and Hi-Val, as well as Toshiba.

A Sony DVD-ROM drive is expected to be available this summer as an upgrade kit, but the company says only that it will ship a real PC with a built-in drive "sometime this year," according to Sugiyama. Toshiba expects to ship DVD-ROM drives in its Infinia line sometime in May, a company spokesperson said.

Compaq representatives did not return calls.