If you’re one of the millions expected to buy the original “Star Wars” trilogy when it premieres on DVD this Tuesday, you may want to wait.
Like a rebuilt Death Star, chances are that there’s an improved, fully operational version right around the corner.
Film studios and hardware manufacturers, who are witnessing the first glimmer of a slowdown in DVD sales, are already planning the next generation of discs that play movies in high definition.
The chance to reissue old films on yet another format is the main reason Sony bought MGM this week for nearly $5 billion, controlling a combined library of nearly 8,000 titles.
Many of MGM’s signature titles, including the James Bond series, were recently released in special-edition DVD box sets – meaning Sony missed out on most of that revenue.
“For Sony, the deal was less about DVDs than it is about HD,” said Scott Hettrick, editor of DVD Exclusive magazine.
“They’re positioning themselves for the next generation.”
In fact, Sony believes the deal will allow them to control the next generation.
As early as fall 2005, manufacturers plan to introduce high-definition machines. But much like the old VHS and Betamax wars, there are two competing standards: HD-DVD, backed by companies like Toshiba, and Blu-ray, owned by Sony.
Currently, most movie studios are on the fence about HD-DVD and Blu-ray, although Warner Bros., which has a relationship with Toshiba, has expressed interest in the former.
By acquiring MGM, Sony can flood the market with titles on the Blu-ray format, forcing studios such as Disney and Fox to follow suit.
If Blu-ray prevails, Sony would receive a license fee of about 5 cents for every DVD sold in that format. It’s pennies, but those pennies would add up to millions.
But the shift to high-def isn’t a sure thing, analysts say. While DVDs have been an unqualified success, high-definition DVDs could just as easily be 8-track tapes or laser discs – format changes that never quite caught on.
“Will consumers think that simply getting a better picture is worth replacing their entire library?” Hettrick said. “DVD was a revolution in every facet. HD is not as big a leap.”
Even though consumers have gotten used to upgrading their cell phones and computers on a more regular basis, they may not want to ditch DVDs so soon, he added.
“The timing is certainly an issue,” Hettrick said. “You don’t want to come out too quickly.”
Studios also haven’t milked the last cent out of DVD sales.
They continue to mine even the most obscure TV shows and out-of-print films for the format.
And previously released movies are getting two or three “re-releases,” packed with documentaries and commentary. A special edition of “Gone with the Wind,” due this fall, is the latest example.
New releases also continue to make money. DVD Exclusive studies show the average movie earns 60 percent to 70 percent of its box-office take on DVD sales and rentals. Five years ago, that figure was only 50 percent.
DVD sales, which topped $6.6 billion for the first half of this year, should set a record in 2004.
But there’s also the possibility that the next film “format” isn’t a disc at all but downloading movies from the Internet.
Still, HD machines may have some tricks up their sleeve. With a broadband connection, HD players could download new features all the time, meaning movies could be constantly updated, said Bill Hunt, editor of The Digital Bits newsletter.
Most HD machines also will play DVDs, meaning consumers won’t have to replace their old discs, Hunt added.
“HD could potentially be a huge thing,” he said. “Diehard fans will buy them, but it’s going to take some time. Most people are not eager to upgrade all over again.”