IP: Digital Video Disk

[Dave Farber <farber () cis upenn edu>]

from today's Asahi Shimbum


INTERVIEW: YOICHI MORISHITA, PRESIDENT, MATSUSHITA ELECTRIC


INDUSTRIAL CO. Matsushita has big, big plans for digital videodisc By
HIROMITSU UEKI Asahi
Shimbun 


Q: What are the electronics industry's expectations for the digital
videodisc (DVD)? 


A: Matsushita next month will become the first consumer electronics
manufacturer to offer DVD
players. 


The videodisc, the same size as the music-only compact disc, is able to
record music and video images,
both in high-quality digital format. It can accommodate a movie more than
two hours long. 


The electronics industry has agreed on standard technological
specifications and measures to prohibit
pirated copies, which has paved the way for the DVD's debut. 


We will begin marketing DVD players on Nov. 1 and wide-screen TV sets
equipped with a DVD player
on Nov. 15. 


The electronics industry expects that the DVD will create a market of 5
trillion yen in the year 2000--80
million DVD player units and 1.5 billion pre-recorded videodiscs. 


We at Matsushita aim to achieve 700 billion yen in sales of DVD players and
become the world's largest
supplier. 


Q: The film industry may be slow to release pre-recorded videodiscs. Won't
the shortage of attractive
contents pose an obstacle to the DVD's successful launch? 


A: Dozens of titles are expected to hit the market by the end of the year. 


It is true that Matsushita executives were divided over whether we should
take the lead in marketing
the DVD or whether we would be better off waiting until a substantial
number of pre-recorded discs
became available. 


We now want to take time and nurture the DVD "culture." 


Matsushita's DVD players will have a feature that allows users to play
conventional CDs and a
different type of video CD (already on the market). 


In addition, the DVD's application will not be limited to films and other
video images. As a
multimedia disc, it is also able to store a variety of information, such as
computer data. 


Q: Does it mean that personal computers will increasingly compete with
television? 


A: Matsushita already offers the Woody series of personal computers that
have a built-in television
function. 


We expect that personal computer manufacturers will also come up with
models equipped with DVD
players. 


Japanese electronics manufacturers have been leading the efforts to develop
this next-generation disc.
Competition will be fierce among domestic manufacturers. 


Matsushita will fight the competition by developing easy-to-use,
high-performance products. 


Q: Are discounters and other large-scale retailers making inroads in the
market for conventional
consumer electronics products? 


A: The Atlanta Olympic Games buoyed sales of television sets and
audio-visual equipment. 


We also saw bullish sales of air conditioners. Seven million units were
sold between October 1995 and
July of this year, which was 8 percent more than the same period a year
earlier and marked a record
high. 


In addition, refrigerators, cellular phones and personal computers have
been selling strong. It is true
that traditional Matsushita-affiliated outlets are facing stiff competition
from discounters and various
other types of large-scale retailers. 


The time has come when consumers can choose to buy household electronics
products from a wide
range of stores. 


We expect that Matsushita-affiliated distributors will survive the
competition by providing close-knit
services in the vicinity of customers. 


Q: Is the scheduled hike in the consumption tax next April expected to
increase the sales of electronics
products up through March? 


A: That's not a likely scenario, although buyers have been rushing to place
orders for new homes
before the consumption tax is raised. 


I think that the impact--raising the tax from the current 3 percent to 5
percent--will be much smaller
than when the tax was first introduced. 


The government, of course, must review its fiscal expenditures and
implement administrative reforms
as a precondition for the consumption tax hike. 


Q: Do you think that the low interest rates are hampering personal spending? 


A: Current interest rates are at extraordinary levels. 


The policy has been crippling investments by the welfare pension program
and other funds and also
squeezing the livelihood of pensioners. 


The central bank needs to raise interest rates once the economic recovery
is on a firm track. 


The financial assets of individuals total more than 1,000 trillion yen.
That means that if interest rates
rise by one percentage point, consumers will obtain an additional 10
trillion yen. 


Yoichi Morishita, 62, joined Matsushita Electric Industrial Co. in 1957
after graduating from Kwansei
Gakuin University. He was primarily responsible for sales and marketing. He
became president in
February 1993. 


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