Twin Dilemma: DIVX & Criterion

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Twin Dilemma: DIVX & Criterion

I have been keeping an eye on developments regarding DIVX and, more recently, Criterion's entry into DVD with six $39.95 list-price catalog re- issues. The stupidity of Video/Hollywood industry power brokers never ceases to amaze me. When will these people ever learn?

For those who don't already know, DIVX is a DVD-based pay-per-view scheme the has been cooked up by the folks at Circuit City in partnership with a law firm specializing in film licensing. The system works like this: A special DIVX equipped DVD player is offered to the consumer, along with DIVX encrypted DVD discs that will retail for about $4.99. The DIVX user is granted a 48 hour "grace" viewing period for each new disc purchased. After that, a per-use charge is assessed each time a DIVX disc is played. Billing is reported by a modem built into the DIVX player, which is connected to the user's phone line.

Ok folks, I want to see a show of hands on this question: How many of you are just busting the door down to pay over $500 for yet another disc player, just so you can pay "rent" each time you use the discs you buy, and be thrilled by the knowledge that your disc viewing habits are being tallied by the DIVX billing database system? Well, the folks at Circuit City are reported to have invested over $100 Million dollars on the assumption that your answer is a big YES!.

If you've finished laughing at how many Circuit City Executives soon may be looking for work, lets move on to Criterion's new $39.95 list price DVD's.

Our regular readers of The Laser Beam will know that DVD is the least expensive mass market video format. Single layer DVD's cost about $.85 cents to manufacture in quantity, as compared to $2.50 for VHS or about $6.00 for a single 2-sided Laser Disc. Considering this, why are Criterion DVD releases being offered at the same $39.95 price point as their Laser Disc counterparts? Remember, these are rather obscure "classics", such as Jean Cocteau's Beauty And The Beast or Francois Truffaut's 400 Blows. Perhaps Criterion has forgotten just how many of those $39.95 list price "special edition" Laser Discs ended up in Camelot and Musicland chain store cut-out bins for under $12.00! More importantly, how many consumer who originally paid full price will remember those cut-out prices when they are faced with the same list price again? While this sort of "gouge & dump" marketing may be profitable at first, it effectively poisons the well for long term sales. All too often, I 've been asked why Laser Disc never became a mass market product. My answer is simple: price. Asking too high a price was the first mistake. Destroying the product's value-worth by dumping was the second.

All told, the best solution to all of this is patience. The titles currently tied up by DIVX launch will almost certainly become available on DVD after DIVX fails. In the meantime, I suggest buying your electronics from Starship or any other non-Circuit City retailer. Also, if you think a DVD price is too high, don't pay it! Just as sure as "never" means "next year" in Hollywood, these higher prices are bound to come down.