DVDs Lose Their Shine

The home-movie business could face more pressure thanks to a host of emerging technologies being rolled out by cable operators and an onslaught of new video applications.

As cable companies like Time Warner's (TWX) Time Warner Cable explore enhanced services like video on demand and mobile video partnerships, some industry hard hitters believe the DVD could soon go the way of the VHS.

Time Warner Cable Chairman Glenn Britt, speaking at a UBS Warburg media conference in New York this week, shrugged off worries about threats to the cable business by saying new video platforms could end up hurting the DVD market more.

Asked if he felt the video-capable Apple (APPL) iPod was a threat to cable, Britt responded that he sees it more as "a substitute for purchasing DVDs than as a threat to the cable industry." He also touted the various advantages of new DVR technologies that Time Warner and rivals like Comcast (CMCSA) are spending millions to roll out.

If a set of DVD sales misses at major animation studios Dreamworks (DWA) and Pixar (PIXR) earlier this year are any indication, the lucrative DVD market could mature more quickly than the entertainment industry, which still enjoys nice margins on DVDs, would like.

"All kinds of distribution platforms are cutting into a reasonably finite media consumption pie," says one media strategist, who adds that DVRs are one piece of it and the iPod is another.

Cable companies and large content companies are partnering and rolling out more comprehensive video services. There is little question that mobile video is taking flight on cell phones via Apple, Cingular, Verizon Wireless and Sprint/Nextel (S).

GE's (GE) NBC Universal said this week it is partnering with Apple to provide some of its hit shows like Law & Order available for download. Meanwhile CBS said it is partnering with Verizon to provide some of its popular series, like CSI and Survivor, on Verizon's wireless v chip phone this month.