Artisan to Issue First High-Definition DVD

Artisan to Issue First High-Definition DVD
Studios and device makers still have basic issues to resolve before more discs roll out.

By Jon Healey, Times Staff Writer

Artisan Entertainment Inc. plans to release the first high-definition DVD for the home video market next month. Its lead character is a computer-driven android, which is fitting.

That's because the disc will play only on a PC.

The movie is "Terminator 2: Judgment Day," already released twice on conventional DVDs, once on regular VHS, once on laserdisc and once on D-VHS, a high-definition version of videotape.

FOR THE RECORD
"Terminator 2" revenue — An article in Monday's Business section about a new DVD release of "Terminator 2: Judgment Day" misstated Artisan Entertainment Inc.'s share of the revenue generated by the film in North America. The figure reported — more than $400 million — reflects box-office and home-video revenues. However, Artisan holds the rights to distribute "Terminator 2" only on VHS and DVD. The privately held company declined to disclose exact sales figures.

For Artisan, which reportedly has grossed more than $400 million from "Judgment Day," the high-definition DVD-ROM due out June 3 offers "a look into the future of where the DVD format is going," said Jeffrey Fink, president of sales and marketing for Artisan Home Entertainment.

It also represents a victory for Microsoft Corp. The software giant has been trying to stoke Hollywood's interest in its compression technology that squishes the data required to build a high-definition picture so a movie will fit on a single disc.

But the release isn't likely to trigger a flood of high-definition discs because the major Hollywood studios and consumer-electronics manufacturers are facing a judgment day of their own.

The studios have to decide whether to put movies out on high-definition discs, a commitment they aren't ready to make. And device makers have to either agree on a single standard to play the discs or fight it out in the marketplace.

One of the main factors holding up the next generation of DVDs is the studios' demand for more protection against piracy than the current discs provide. Other issues include concerns about a new product undercutting the profits generated by regular DVDs and the incompatible formats being backed by different manufacturers.

High-definition refers to a cinematic version of digital video that delivers five times as much detail as a conventional TV broadcast. To see the improvement, viewers need a specially equipped TV set or computer monitor.

Most of the high-definition programming today comes from major TV broadcasters — Viacom Inc.-owned CBS, Walt Disney Co. unit ABC and PBS in particular — and from movie or sports networks on cable and satellite. The only prerecorded HDTV consists of about three dozen D-VHS movies from Artisan, News Corp.'s 20th Century Fox, Vivendi Universal's Universal Studios and DreamWorks SKG.

Although sales of high-definition televisions have been brisk, less than 5% of all U.S. homes have a digital set. That limits the pressure on studios and consumer-electronics companies to deliver high-definition home video.

But Microsoft has urged the studios to view PCs as another outlet for high-definition movies. The latest generation of microchips are powerful enough to deliver the massive amount of data required for HDTV, and a growing number of computer monitors are capable of displaying it.

Microsoft's compression technology, which it says does not degrade picture quality, enables movies to be stored in smaller spaces and transmitted more rapidly over networks.

The new DVD, titled "T2: Extreme DVD," consists of a digitally remastered version of the standard DVD and a second disc with a high-definition DVD-ROM. The latter disc, which can be played only on computers running Microsoft's latest operating system, will provide more picture detail than many HDTV broadcasts, Microsoft officials said.

Artisan wanted to re-release the movie on DVD to take advantage of the next installment in the "Terminator" series, which AOL Time Warner Inc.'s Warner Bros. is releasing this summer. Although the Windows Media approach isn't necessarily the ultimate high-definition format, Fink said, it is what's available now.

Erin Cullen, a product manager in Microsoft's Windows digital media division, said the company isn't working on any other high-definition DVDs for feature films at the moment. However, in a bid to push its proprietary format beyond the computer and into the living room, Microsoft has submitted its Windows Media technology to the industrywide DVD Forum as a possible standard for high-definition video, she said.

The software giant faces plenty of competition on that front, particularly from technologies that use higher-capacity discs and less compression. The format endorsed by the largest contingent of consumer-electronics companies is called Blu-ray, which is backed by Sony Corp., Panasonic parent Matsushita Electric Industrial Co., Pioneer Electronics (USA) Inc. and six other manufacturers.

Andy Parsons, a senior vice president at Pioneer, argued that next-generation DVDs should be as close to archive quality as possible, which would rule out highly compressed formats such as Windows Media.

"Why squeeze things down if you don't necessarily have to do that?" he asked.

Sony started selling its first Blu-ray recorders in Japan last month, but there are no prerecorded discs available and there probably won't be for several years, industry officials predict. Brad Hunt, chief technology officer for the Motion Picture Assn. of America, said the studios still are talking to manufacturers about a number of issues related to the next-generation format, only one of which is copy protection.

Crossan R. "Bo" Andersen, president of the Video Software Dealers Assn., said his members are nervous about the proliferation of high-definition formats. But manufacturers and studios have a couple of years to settle on a standard before there will be significant demand from consumers, he said.

There's also a risk of bringing out high-definition DVDs too early, Andersen said, because the format could be "stillborn" if the studios don't support it immediately with a flood of releases.

"It would be even worse," he added, "if there were introductions with confusing formats for consumers. They'd stay away in droves."

On the other hand, some competition in the marketplace between formats could lead to better products, said Andrew G. Setos, president of engineering at News Corp.'s Fox Group.

"Consumers appreciate good products at low prices. But you don't get there with monopolies," Setos said. "You get there with robust, competent, tough competition.

"That's how our society operates," he said. "Early adopters buy stuff, and sometimes it's obsolete."