STANDARD CD SEEN AS MULTIMEDIA KEY

WEST HOLLYWOOD, Calif. -- Interactive multimedia products on 5-inch compact discs will not fulfill their mass market potential until platform formats become more standardized.There was almost unanimous agreement on that point at the Hollywood 2000 conference, held here Dec. 13 to 14 by Advanstar Associates, Carmel Valley, Calif., a program that addressed the future of video, video-on-demand and multimedia.

WEST HOLLYWOOD, Calif. -- Interactive multimedia products on 5-inch compact discs will not fulfill their mass market potential until platform formats become more standardized.

There was almost unanimous agreement on that point at the Hollywood 2000 conference, held here Dec. 13 to 14 by Advanstar Associates, Carmel Valley, Calif., a program that addressed the future of video, video-on-demand and multimedia. "The video business didn't take off until the VHS-Beta fight was resolved," said Mike van der Kieft, director of business development at Blockbuster Entertainment, Fort Lauderdale, Fla.

"I don't think anyone is going to realize the full potential of the CD-ROM multimedia business until [the competition between incompatible formats] is resolved. As soon as we can narrow it down to one or two, I think we will all be better off," he said.

The major players among the different formats include Philips' CD-I, 3DO from 3DO Co., CD-ROM drives for Apple and IBM-compatible computers, a CD game system from Sega and a competing system from Nintendo that has yet to be introduced.

"With all these platforms and the great market opportunity that exists, there is going to be a tremendous amount of product proliferation, and this will do even more to confuse consumers," said Lou Fogelman, chief executive officer of LCF Consulting & Associates, Beverly Hills, Calif.

Referring to the development of the music CD market, Fogelman noted that there has been a single standard format available for 10 years, and still only 35% to 40% of U.S. households have CD players.

But one panelist said multiple formats and platforms could be used within the home. "There's a lot of segmentation of behavior for entertainment in the home and it all needs to be addressed," said Joanna Tamer, president of S.O.S., Inc., Marina Del Rey, Calif.

For example, Tamer sees existing VCRs and cartridge game machines coexisting in the home with more sophisticated television set-top CD machines, like CD-I and 3DO, and personal computers with CD-ROM drives located elsewhere in the home. Overall, she sees the market for CD-based multimedia products developing about a year ahead of the industry's expectations.

"In the entertainment industry, the more choices you have, the more people will buy. With the more options you give people, you are not segmenting the market but growing it," she said.

But as the CD market develops, and 32-bit and 64-bit game systems arrive, the 16-bit cartridge will rapidly become obsolete, said Fogelman. "The 16-bit market will go away faster than the 8-bit market," he said.

This was strongly rebutted later in the program by Doug Glen, group vice president of strategic planning and new business at Sega of America, Redwood City, Calif. "Talk of the early death of 16-bit is tremendously exaggerated," he said.