Steve Nickerson: DVD Launch Memories from the Front Row

Twenty-five years is a long time that passes in the blink of an eye.

The No. 1 song in March 1997 was “Wannabe,” by the Spice Girls, and the two biggest movies that month were Liar, Liar, starring Jim Carrey, and Private Parts, starring Howard Stern. Also in that month, “Buffy the Vampire Slayer” made its TV debut and the Arizona Wildcats won their first NCAA basketball championship.

March 1997 also saw the launch of two new “digital” consumer products in the United States — the Palm Pilot and the very first DVD players.

If you want to know more about what happened with the Palm Pilot you will have to Google it or visit Wikipedia.

But about those DVD players, what follows are the memories and recollections of someone who had a front-row seat to the activities leading up to those initial players being shipped in March 1997, as well as some of the key events that would follow in the next few years, which all led to sales of DVDs being the single biggest revenue source for all the Hollywood studios from 2000 to 2010.

Like most “overnight” successes, the road to the launch of DVD was long and hard. I remember the first time I saw a “demonstration” of DVD at the Toshiba R&D facility in Tokyo in 1994. The technology was nowhere close to where it needed to be, but we were given a demo so that we could more easily say no to the request of our biggest U.S. customer, Circuit City, which wanted us to support a different disc based format (that four years later would be Divx!!!)

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The following spring (1995) we did demonstrations of DVD to all of our U.S. customers during our national sales meeting at the Atlantis resort in the Bahamas. There is a whole other article that could be written of the foibles of “showcasing” a not-yet-ready new technology at an island resort that had been open less than 60 days. Instead, let’s just say the meeting attendees were completely and absolutely underwhelmed.

The initial response from most executives at the biggest consumer electronics retailers of that time went something like this – “We already have laser disc players and nobody buys those” and “What customers will replace their VCRs with a device that DOESN’T record” and “Nobody will pay $600 for that!”

One of the big “selling” points of DVD technology was that the storage capacity of the disc was going to transform multiple industries. It was not just going to revolutionize the way we watch films and TV shows at home, but it also would transform the music industry (DVD Audio) and the computer industry (DVD-Rom). As a selling point to retail channel partners, the idea of having three different industries having new products being driven off this one new technology for the next 10 to 15 years was, at the very least, intriguing. But the reality was that having six different constituents (hardware and software for music, computing, and video) in the room while trying to finalize the specifications of DVD technology was, at the very least, an absolute nightmare!!

(It should not be minimized that many of the key players at the time were also involved with another multi-industry “launch” effort, that of high-definition TV.)

Various consumer electronics companies used the winter CES in January 1996 to “showcase” their soon-to-be-delivered DVD players to the press and to the industry. But the final specifications, and details around copy protection and region coding — which was a critical component for the Hollywood studios — were still being negotiated, so all those products shown in Las Vegas were prototypes, not mass manufactured, consumer ready products.

The entire year of 1996 was spent trying to create support for DVD on two fronts. The first was with the various companies that hopefully would be manufacturing and selling some type of DVD product, essentially either a disc or a player. The second was with retail channel partners, whose support was essential for a successful launch, as they would be the ones interfacing with the end consumer and explaining all the astonishing benefits they would get from this new shiny disc.

The saying “Success has many fathers, but failure is an orphan” is often used to indicate that many people take credit for wins, and no one shoulders the responsibility for losses. But in the case of the success of DVD, there were certainly key individuals who were the “visionaries,” while there were other people who were the tireless “drivers” and “evangelists.”  Additionally, there were numerous “foot soldiers” who worked endless hours doing groundbreaking work to make manufacturing the products even possible. Without the successful combination of all of these “fathers,” DVD might not have been the most successful CE product launch ever, but it might have joined many other “breakthrough” technologies in the consumer goods “orphanage.”

Because of the eventual success of DVD, the “revisionist” history often states it was a “hit” from the launch in March 1997. But the reality is that there were only a few companies involved in the first nine months the product was available (three to four studios and three to four CE companies), while others took a “wait and see” approach. There were about 350,000 players sold to U.S. consumers in 1997. Many people forget about the post-launch “format war” in late ’97 and early ’98 that was created by Circuit City, some CE companies, and some Hollywood studios. It is scary to think of how different things would have been for Hollywood if that “war” had lasted a couple of years, instead of just several months.

However, once that format skirmish had passed, for the DVD format it was off to the races, and the next seven to eight years was truly a “boomtown” for any company that was serious about the DVD business.

And then came BD vs HD-DVD … oh well, sorry, we have run out of time, so we’ll leave that story for another day!!!!

Steve Nickerson was SVP of Sales and Marketing for Toshiba America Consumer Products — a subsidiary of Toshiba Corp., the company that manufactured the very first DVD player — from 1991 to 2000. He later spent seven years on the software side at Warner Home Video.

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