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Where's Interactive DVD?
Finding a Future in the Multimedia Market

Philip De Lancie

July 2000 | Remember the mind-1990's? Those were heady days for interactive multimedia. CD-ROM drives and 14-inch color monitors were established as standard equipment for personal computers. Drive and CPU speeds were picking up steam, making navigation less sluggish and quarter-screen video watchable. Technologies, such as QuickTime and Hybrid CD-ROMs, were beginning to overcome barriers to cross-platform compatibility. And titles, such as Myst and Encarta, were proving that the CD-ROM could be a viable consumer product. Best of all, a new high-density optical format was on the horizon that would transcend lingering limitations of capacity, speed, and compatibility, finally allowing interactive multimedia to reach its full potential.

Fast-forward five years, and the picture for interactive multimedia looks far different than optical media enthusiasts had envisioned. True, the new optical format--DVD--has rapidly achieved an impressive installed base: some 8 million set-top DVD-Video players and 30 million computer-hosted DVD-ROM drives. But only a seeming handful of the more than 5,000 DVD titles in commercial release really exploit DVD's interactive potential, either within the DVD-Video specification or delivered on DVD-ROM.

Instead of ushering in a new era of interactive education, reference titles, and games, the commercial DVD market is dominated by feature film and music video titles, most of which use interactivity in a very limited way. And the spotlight--as well as the hype--has shifted entirely to the Internet. It's an implausible scenario to those who believed that speed and resolution were the keys to consumer acceptance; the nominal (rarely achieved) bandwidth of the fastest available dial-up connection (56kbps) is only four percent of that offered by those long-since-discarded single-speed CD-ROM drives (1.4Mbps).

If DVD addresses the limits of CD-ROM, but has yet to beget a market for truly interactive titles, what does that say about the commercial viability of interactive multimedia delivered on a fixed storage medium like optical disc? Is it a question of insufficient marketing, technical obstacles, or perhaps a fundamental lack of consumer interest? To assess the current situation, and the prospects for the future, we spoke with 10 professionals involved in both title production and tools development.

The Current Market

"There really isn't much going on in the way of consumer DVD-ROM or highly interactive DVD-Video at the moment," says David Anthony, president of the authoring house Metropolis DVD in New York City. "I'd be surprised if there were over 100 titles; a couple of games and a couple of DVD-Videos is all I've seen. And I don't see much in development. I've been going to the E3 show for the last few years, and no one has jumped out and said, 'Hey, we are doing DVD.' "

Anthony's assessment is shared by David Foster, general manager of Digital Leisure in Gormley, Ontario. The company focuses on games, including a series of Dragon's Lair titles that are available in both DVD-ROM and DVD-Video versions. Foster says he knows of only seven game or "game-like" titles currently available on DVD, with perhaps another four in development.

As for non-game interactive titles, Multimedia 2000 in Seattle distributes several on DVD-ROM, including Better Homes & Gardens Ultimate DVD Cookbook, Warren Miller's Ski World, Webster's DVD Encyclopedia, and Home Depot's Home Improvement 1-2-3. But that doesn't make general manager Ken Goldstein bullish. "With the current state of the market," he says, "I'd be surprised if there were a large number of interactive DVD titles in development."

Mark Johnson was formerly active with DVD development house DVant Digital, and is now technical manager with tools vendor Daikin in Novato, California. Johnson says most of the DVD-ROM titles on the market were adapted from existing CD-ROM titles, and made specifically for bundling with DVD-ROM upgrade kits. He does see some growth for electronic encyclopedias, clip art libraries, and other archival-style DVD-ROMs. But he says some of these titles offer "little more interactivity than an application for sorting through the hundreds of thousands of files on the disc."

In sum, then, the current state of activity for interactive DVD seems to be pretty much as described by Jesse Blankenbiller, president of Sumeria, a San Francisco company best known for informational CD-ROMs. "It's extremely lean," he says. "The market for DVD-ROMs looks dim."

Plenty of Potential

For multimedia publishers like Blankenbiller, the dearth of DVD development is doubly disappointing because the format has not only a sizeable and growing installed base, but also the capabilities to be an attractive interactive platform. "Just last year," he says, "I was working on a full-length video documentary on DVD that integrated additional content from our OceanLife: Eastern Pacific CD-ROM title, including an encyclopedia of information in a non-linear format. At any point in the documentary you could access an on-screen menu to find out more, and then pop back into the documentary as a better-informed viewer."

Even without such integrated DVD-Video content, DVD-ROM alone offers what Johnson calls a "bigger, faster, cheaper" alternative to CD-ROM. "A DVD-5 costs about $1.60 to manufacture," he explains, "and holds the data of approximately seven CD-ROMs, which would cost $4.20. And a DVD-9 can hold 13 CD-ROMs for about $2.50, versus about $7.80 for the CDs."

Of course, these savings in replication cost only matter if you need all that space. Johnson acknowledges that when DVant was shopping DVD technology to game developers, many said they had enough trouble filling a CD-ROM. And producing more content to take advantage of the space requires additional resources.

"Creating a basic Hollywood movie title takes significant time as it is," says June Tanaka, manager of multimedia marketing at tools vendor INTEC America in Menlo Park, California. "To apply creative interactivity to DVD extends the project schedule. Creating the story scenario and all the assets for multi-angle and multistory titles is extremely time-consuming work."

Johnson counters, however, that more data capacity does not have to translate into more content. "Instead," he says, "developers can use the extra space to improve the quality, not just the quantity. By using high-bitrate Cinepak, MPEG-1, or MPEG-2 video, for example, it is possible to create larger video windows with much greater fidelity than is possible using CD-ROM."

DVD-Video also offers multimedia developers the chance to target a well-defined standard, the lack of which was a huge impediment to CD-ROM. "For CD, the platform kept changing," recalls Chris Armbrust, president of Marin Digital in San Rafael, California. "It was MS-DOS 4, Windows 1-3, Mac OS 2-5. And it took five years--1987 to 1992--before the better interactive CD-ROM titles were developed and accepted. The challenges of DVD are small by comparison. DVD provides a much more solid and powerful platform than CD."

DVD Distribution

DVD-Video is often seen as ill-suited to complex conditional interactivity, due in part to the physical limits of the set-top design.
Another plus for DVD is the fact that you do not need a computer to play a DVD-Video title. "That opens a whole collection of new sales channels," Daikin's Mark Johnson says, "The title developer no longer has to struggle for shelf space in computer stores. Now he or she can look to alternatives, such as video and music stores, department stores, online retailers, and consumer electronics stores. This is particularly beneficial for titles that do not specifically target 15- to 24-year-old males."

But while DVD-Video potentially broadens DVD distribution channels, it doesn't necessarily follow that interactive titles will be welcomed on retail shelves. "The biggest problem is limited shelf space in the retail DVD market," says Ralph LaBarge, managing partner of Alpha DVD in Gambrills, Maryland. "With every major motion picture studio releasing their catalog on DVD, there is not enough space for interactive niche titles. So they are typically sold via Internet DVD retailers, who only serve a small portion of the consumer DVD market."

Even when interactive DVD-Video titles do make it into stores, Digital Leisure's Foster says that the challenge is "to stand out as something different from everything else on the shelves. Many consumers don't even realize that they can play games on their DVD movie players."

As for DVD-ROM, Foster says that consumers don't understand it. "All they know about the technology is that they can play movies on their computers," he says. "They will buy the DVD-Video versions of our products to run on a computer, without knowing that a DVD-ROM version exists. Also, there are very few releases, which makes it difficult for retailers to allocate space to the category. With few retailers, sales are not spectacular."

Without a DVD-ROM section in their stores, Johnson agrees, retailers don't know what to do with interactive products. And he says that those stores that do place orders for DVD-ROM may suffer from high returns because customers accidentally pick up DVD-ROM titles without realizing that they will not work in their CD-ROM drives. "The average consumer has a hard time telling the two formats apart," he points out.

Technical Tradeoffs

In addition to the confusion at retail, DVD-Video is often seen as ill-suited to complex conditional interactivity, due in part to the physical limits of the set-top design. "If the set-top box doesn't have a phone/data line, a keyboard, or joystick peripheral inputs, the consumer will not be able to take full advantage of interactivity," says INTEC's Tanaka. "Only on a PC could the user experience more than simple menu and button navigation."

Interactivity is also made more challenging by the players' lack of much memory or processing power. "Essentially there is no CPU in a DVD-Video player," says Metropolis DVD's Anthony, "so anything that requires real logic, like database calls and Boolean search logic, just isn't possible."

An additional complication is pointed out by Gary Hall, product manager for professional products at Spruce Technologies, a San Jose-based DVD tools maker. "Interactive scripts are only executed in response to events, such as a button press or the end of a video segment," he says. "This makes it difficult to set up complex, multithreaded interactions."

But others take issue with the notion that the interactivity of DVD-Video is inherently crippled. "There are really no technical barriers to releasing interactive titles," Alpha DVD's LaBarge says. "It requires additional work, but it is possible to create highly interactive titles with the existing DVD standards."

Daikin's Mark Johnson agrees. "The DVD-Video specification has a lot of really interesting features," he says, "that are not commonly available in any other format, such as seamless multi-angle video and multistory, which allows branching through a sequence of video clips. There are navigation timers and register modes that allow the developer to implement all kinds of timing functions. And there are a wide range of bit-wise operations and random functions that allow you to track information and add variety."

Johnson says the format's features are strong enough that "on the CD-ROM to DVD-Video adaptations that I've done, we were able to transfer 95 to 98 percent of the original functionality. And in several cases, the resulting titles were even more enjoyable to play. They benefited from gorgeous full-screen video and audio while the CD-ROM version was limited to quarter-screen video with low-quality audio."

Tools and Testing

The ability to take advantage of the features that Johnson describes, however, depends not only on the format itself, but also on the available tools. "All in all," Digital Leisure's Foster says, "we're pleased with what we've been able to produce, but it's not a simple process. The authoring tools are designed for movies, not to handle the larger projects that you have with interactive DVDs. And being limited to actions on GOP boundaries is also a limitation that we need to work with in our design."

Metropolis' Anthony concurs that there is "very little in the way of advanced tools that let one program serious interactivity for DVD-Video. For instance, we recently had an advertising agency client with a group of spots. They wanted to be able to show prospective clients different subsets of the spots from a playlist that they could resequence on-the-fly. It ended up being very complicated, and took about four or five days to program. We could have done the same feature in Macromedia Director in about half-an-hour."

Even when such advanced authoring is successful, it may be undermined by inconsistent playback--a problem that need never have arisen if the various makers of playback hardware had been more careful to harmonize their approaches. "Each manufacturer's engineers interpret the spec a little differently," Anthony says. "So when you get into advanced features, you always run the risk of player incompatibility. You can actually fix a problem for one player that breaks a feature on another player. That's why the major studios use very basic features. The really ambitious titles, like The Matrix, are known to have major compatibility issues."

Vexing as this problem is with set-tops, it's even worse among the various DVD playback solutions for computers. DVD decoders have been available for Macs and PCs for over three years, and one can generally count on being able to play a DVD-Video title on a DVD-equipped computer. But playing back DVD-Video material from within another application is another matter.

"The most important thing that the DVD industry can do to help encourage the growth of the DVD-ROM business," Johnson says, "is for all the DVD decoder manufacturers to finally standardize an API for accessing high-quality MPEG-2 video and Dolby Digital audio. There is still far too much confusion in the industry regarding driver support for the Windows Media Control Interface (MCI), DirectShow, QuickTime, or any other standardized API. Microsoft's DirectShow promise from over a year ago has not materialized, and Apple still hasn't delivered an API for controlling DVD playback. So it is almost impossible to create a single application that can effectively play MPEG-2 video on all platforms."

The burdens created by these compatibility problems fall squarely on developers, such as Zuma Digital in New York City. "We recently created an interactive DVD-ROM kiosk for a client," says COO and creative director Blaine Graboyes, "and found ourselves doing weeks of research and testing to resolve issues that were not even ours. But there was no one else to take responsibility. There are few resources and few ways to resolve issues. The big guys like Microsoft, Intel and Macromedia could do a world more to support developers from every angle, including better standards for playback, better tools for testing and development, and resources for developers to get assistance."

Testing is particularly difficult because of the expense of creating one-off discs. "For a CD project," Graboyes says, "you burn $2 blank CD-Rs in a $200 CD-R burner, take them around for testing, and when the project is completed you send out a CD-R as a master. No such luck with DVD. A blank is $35 and the burner is $5000. DVD-R compatibility issues make testing more complex, and it is basically impossible to test a DVD-9 project without making check discs."

The fact that most DVD plants still require Digital Linear Tape (DLT) as a master for replication is also a frustration for interactive developers who are used to sending in a CD-R. "By repurposing video and adding an interactive encyclopedia," Sumeria's Blankenbiller says, "we produced a title for about the cost of a CD-ROM. But because it was a DVD, we had only just begun to incur costs. I spoke with 20 replicators, and they would accept a one-off or a DVD disc-image only if it was ready to be put to DLT format. The replicators are unwilling to cater to the producers of interactive content, and their process makes it cost-ineffective to try to sell content at about the same price point as a CD-ROM. And since consumers see linear DVDs for sale at $18 to $32, they are not willing to pay more for interactivity."

A Brighter Future?

Ironically, the current emphasis on the Internet--which has historically diverted attention and talent away from optical media--may hold the key to interactive DVD's future.
Given all these unresolved obstacles, it's fair to wonder whether the future for interactive DVD will be any brighter than the present. "With somewhere between 30 and 50 million DVD PCs," Graboyes says, "there is obviously huge potential. But the question is whether anyone needs or wants this content and these titles. It seems that the gaming community is pretty happy with CD distribution and the Internet. From what I understand, Internet-based gaming is major and everyone is pushing hard to stay that route."

Ironically, this emphasis on the Internet--which has historically diverted attention and talent away from optical media--may hold the key to interactive DVD's future. "The solution," says AlphaDVD's LaBarge, "will be to develop WebDVD titles that store the content in the DVD-Video space, but deliver connectivity and interactivity through the Web space."

"Web-connected discs can and will revolutionize the gaming and interactive consumer experience," Graboyes enthuses. "Systems like NUON, Sony PlayStation 2, and the new iDVD units, as well as the continued proliferation of PC DVD systems, will make Web-connected discs the next big thing across broadcast, movies, retailing, gaming, and education. PS2 sold 1.4 million units in its first month!"

Spruce's Hall also sees the Web as the "salvation of interactive DVD." But he suggests that current concepts about the nature of interactivity don't reflect the realities of consumer interests. "A good movie is far more impressive to the viewer than nearly any interactive production so far," he observes. "The most successful use of DVD is what I would call 'amplified linear' presentation, where I can take apart and understand a movie in new ways. I can listen to commentaries from the actors, producers, or composer in line with the content. I can see detailed presentations of how individual scenes and effects were produced. I can go online and chat with folks watching the same movie at the same time. This is the real meeting of 'Hollywood production values' with 'interactive entertainment.' "

If Hall's definition of interactivity rings true, then interactive DVD is already here. But LaBarge points to a natural progression in consumer entertainment markets, and suggests that an opportunity for greater interactivity is still to come. "Consumers have traditionally bought special-interest titles in both the LaserDisc and VHS markets," he says. "But the early years of each market were dominated by theatrical releases. Once consumers decide they have enough movies for their DVD players, they will want to expand out into other genres. Interactive titles will never be a large percentage of the market, but they should be a profitable portion of it."


Companies Mentioned in This Article

Alpha DVD
3109 Arrowhead Farms Road, Gambrills, MD 21054; 410/721-9460; Fax 410/721-9461; rlabarge@alphadvd.com; http://www.alphadvd.com

Daikin U.S. Comtec Laboratories
999 Grant Avenue, Novato, CA 94945; 415/893-7800; Fax 415/893-7807; info@scenarist.com; http://www.DaikinDVD.com

DeLorme
P.O. Box 298 Yarmouth, ME 04096; 207/846-8900; Fax 207/846-7051; support@delorme.com; http://www.delorme.com

Digital Leisure
33 Cedar Ridge Road, Gormley, Ontario, Canada L0H 1G0; 905/888-9550; elizabethf@digitalleisure.com; http://www.digitalleisure.com

INTEC America
1010 El Camino Real, Suite 370, Menlo Park, CA 94025 USA; 650/327-9402; Fax 650/328-4183; dvd@inteca.com; http://www.inteca.com

Marin Digital
4340 Redwood Highway, Suite F224, San Rafael, CA 94903; 800/881-7982, 415/507-0470; Fax 415/507-9968; info@marin-digital.com; http://www.marin-digital.com

Metropolis DVD
1790 Broadway, 9th Floor, New York, NY 10019; 212/675-7300; Fax 212/765-9336; http://www.metropolisdvd.com

Multimedia 2000
2017 Eighth Avenue, #300, Seattle, WA 98121; 206/622-5530; Fax 206/622-4380; info@m-2k.com; http://www.m-2k.com

Spruce Technologies
1054 S. De Anza, San Jose, CA 95129; 888/355-6734, 408/863-9701; Fax 408/861-2216; info@spruce-tech.com; http://www.spruce-tech.com

Sumeria
100 Eucalyptus Drive, San Francisco CA 94132; 415/586-3820; Fax 415/904-0888; info@sumeria.com; http://www.sumeria.com

Zuma Digital
59 West 19th Street, Floor 6, New York, NY 10011; 212/741-9100; 212/741-1605; sales@zumadigital.com; http://www.zumadigital.com


Philip De Lancie (pdel@compuserve.com) is a freelance writer covering media production and distribution technology based in Berkeley, California.

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