While digitally re-mastered back catalogue with added footage will bring them a quick return for little effort they’re concerned at profits being undermined by new release DVDs reaching the rental market too soon after their theatre debut.

According to the New Zealand Video Dealer’s Association about 25 per cent of rentals across the country are DVDs, although in city stores the ratio can get as high as 50 per cent - within five years that’ll be up to 70 per cent.

It is estimated 150,000 New Zealand homes have DVD players – that doesn’t include games machines PlayStation2, Nintendo Cube and Microsoft’s XBox which both double as DVD and CD players. Between 2000-2001 revenues from DVDs rose 181 per cent compared with 13 per cent in VHS sales. It’s estimated retail sales for DVD titles will reach about $30 million this year and triple to $100 million by the end of 2003 when it is believed 250,000 New Zealanders will own a DVD player.

However the free flow of new release American DVD titles into New Zealand was stemmed this year after the movie industry won a controversial legal case forcing these titles off the shelves of hire outlets.

Traditionally theatres have been guaranteed a 2-6 month ‘window’ before a staggered release of rental, sell through, pay-per-view, pay TV and free-to-air broadcast. New Zealand home viewers have often had to wait up to a year for some titles to be cleared for hire despite being available over the internet within a month of official US theatre release.

Hollywood forced DVDs manufacturers to split the world into zones to protect theatre profits - New Zealand is lumped in with Mexico in zone four. The US where 90 per cent of DVD titles originate is zone one which uses the NTSC format. Our PAL format DVDs require a separate pressing process which is only used when films look like being big sellers.

Initially most DVD video units sold here were ‘zone locked’ but hackers quickly provided free patches so most players are sold as multi-zone. Since our parallel importing laws were liberalised in May 1988 about nine local companies began distributing zone one titles. There was a loose agreement not stock ahead of schedule but it soon became a free-for-all.

Video Ezy, one of the distributors keen to take advantage of early release zone one titles forced the matter into the High Court to clarify whether they had the ‘rental right’ under the our Copyright Act. Bill Hood executive secretary of the Motion Picture Distribution and Video Association of New Zealand says his industry won the case and it is now illegal for rental outlets to offer zone one titles ahead of their official release date.

Retail outlets can still sell zone one titles as soon as they’re released in the US but a Bill before Parliament will attempt to make that illegal and re-institute a nine month ban on sales or rental of zone one DVDs after official theatre release. That doesn’t prevent buying over the internet for individual use.

While multi-zone machines remain popular and coded machines can easily be unlocked the major studios and distributors including Columbia TriStar and Sony are continuing to experiment with codes and other ways to prevent DVD titles being played outside intended release zones.

"It’s a case of suck it and see. This whole area is still comparatively new. Some titles will work with some machines and not with others. We have zone one titles that won’t play on multi-zone players and the hardware will continue to change over time," says Mr Hood.

The digital versatile disk (DVD) first released in 1997 is a close cousin to the CD but double sided with 14 times greater storage capacity. It’s superior sound, crystal clear images, director’s cuts, biographies, games, alternative endings, multiple languages and screen formats have endeared it to the home viewer. Market penetration of players has been twice as fast as CD players and three times that of VCRS.

When VCRs first hit the market in the late 70s giving us more control over what we watch, they were luxury items with an entry level of $3-$4000. Within a couple of years the price halved and then halved again until the current low of between $250-$500.

For the first time this year entry level DVD players are now cheaper than a basic VCR and the media, which is cheaper to make than a video, is lighter, takes up less room and has no moving parts, is a similar price at around $30 a title.

Extra features to look for include the ability to play back photographs downloaded from your digital camera and stored on CD, the right connection for your amplifier (co-axial or optical audio outputs), component video output to split the red, green blue colours, gold plated connections, digital zoom, freeze frame and audio sampling rate for sound quality (192MHz bit sampler at the high end). Another high end feature is ‘progressive scan’ which gives an even sharper picture particularly on big screen TVs or projectors.

The NZVDA believes that majority of homes with a DVD player will retain their VCR. Rental outlets are increasingly in direct competition with supermarkets and other retailers selling DVDs. The most popular rental titles to date have been Lord of the Rings, Harry Potter and Shrek.

And if you are heading for the high end why not go the whole way and invest another $700 to upgrade to a DVD recorder. These were around $5000 not so long ago and are now down to a tolerable $2000. The Philips DVD 890 for example has all the features of a high end player and records up to six hours of ‘better than VHS quality’, according to Philips DVD product manager Todd Selwyn.

You can also archive direct from digital movie camera to DVD using the i-link connection. The DVD+RW plays on any DVD player or PC. The rewriteable disks were $50 each last year and are now selling for $30 each – the write once disks at $20.

Panasonic has two DVD recorders, the DMR-E30 selling at $1900 and the latest DMR-HS2 selling for $3000, which includes a 40Gb disk drive and an SD (secure digital) card reader. However it uses the proprietary DVD-RAM technology, which isn’t compatible with most other players.

The price of recorders and media is likely to come down in price drastically over the next year or so proving another major challenge to the VCR.

And of course modern computers with processors speeds above 800MHz will handle the quality of playback required for DVDs. The alternative is to get a dedicated decoder such as Sigma Designs Hollywood Plus.

Software Images general manager John Bishop III says his company is also reaping the results of the shift to DVD duplicating local release DVDs for major distributors and adding localised promotions at the end of a feature movie. There’s growing interest in using DVD for in-shop promotions which can loop continuously without wearing out or needing to be rewound.