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Portable Video Player Sales in Slow Motion

The devices haven't caught on. But new anti-piracy software may spur studios to provide more films.

September 02, 2004|David Colker and Jon Healey | Times Staff Writers

The Walkman revolutionized the consumer electronics industry. The Watchman was a dud. Fast-forward three decades and history could be repeating itself.

Although the iPod and other portable digital audio players have become such huge hits that they're part of pop culture, the outlook for portable video players is far from sure.

The industry is betting that the new crop of hand-held video players, which closely mimic their music-player cousins, will light a fire under sales. The little machines can play movies legally downloaded from online rental sites. They can also store and play downloaded tunes.

Will that be enough? Maybe not. Consumers who want to watch movies on the go already have a lot of options.

"A businessman who commutes on a train often has a laptop and can watch video on that," said Paul Jackson of Forrester Research. "The kids in the back of an SUV might already have a game console, or there might be a screen to show DVDs back there."

In fact, in the three years since Paris-based Archos Inc. introduced the first transportable video player, it just hasn't taken off. Worldwide, only about 300,000 of the devices have been sold, said Envisioneering Group research analyst Richard Doherty, compared with millions of music players.

Listening to music tends to be a passive experience, an activity that can coincide with a variety of other tasks such as working out or walking the dog. Watching a video, on the other hand, requires attention and can't be combined with as many other activities.

A recent survey conducted by Jupiter Research found that although 78% of U.S. residents said they would listen to music on a portable device, only 55% said they would watch video that way.

Besides, there aren't many movies available to download. The biggest studio that currently allows its movies to be downloaded to portable players is Lions Gate Entertainment Corp., whose limited DVD offerings include "Dirty Dancing 2" and "Dogville."

The industry isn't deterred.

The Zen Portable Media Center, the first of the new generation, goes on sale today. The 12-ounce device from Creative Labs Inc. sports a 20-gigabyte hard drive that can hold as much as 85 hours of compressed video, which it displays on a 4-by-3-inch screen.

South Korean manufacturing giant Samsung Electronics Co. plans to introduce a similar unit, the Yepp YH-999 Portable Media Center, this month. Both players will cost about $500.

The Zen and Yepp players aren't equipped to record programming from a television set. They're designed to receive video from personal computers, including television shows that can be captured by a PC with a tuner card.

But what could make the machines more compelling is newly developed anti-piracy software by Microsoft Corp. that makes it possible for them to play rented movies and music.

Older portable music and video players offer no tamper-proof way to delete a video or song when the rental period ends. The Microsoft technology enables people to rent downloadable movies and songs on their computers and transfer them securely to devices like the new Samsung and Creative players.

But first, the major Hollywood studios have to be persuaded that Microsoft's technology works. So far, none has agreed to let online rental firms CinemaNow and Movielink work with the new devices.

Executives from three studios said that they were still studying the technology and that they wanted to provide a legitimate supply of movies to portable players. Otherwise, they said, they risk having people load the players with illegal copies of films downloaded from the Net.

Having a reliable source of major Hollywood movies would be a boon to the players. Historically, new entertainment gadgets haven't caught on with the mass market unless they've had access to a wide array of popular programming.

Until there's enough content to fill up the new players, they could remain a niche item, analysts said.

"But in the next 18 to 24 months," said Michael Gartenberg of Jupiter Research, "they will get more mainstream as people get used to the idea of downloading and watching video this way."

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