'Self-destructing' discs open up new avenue
Flexplay technology allows for promotion without undercutting DVD value.
By David Bloom -- Video Business, 11/13/2002
NOV. 13 | A clever marketing gimmick for MGM's James Bond juggernaut is providing a high-profile demo for a new technology that could create markets for promotional and rental DVDs.
MGM used Flexplay Technologies' special DVDs for 5,000 promo discs mailed out this week with about 25 minutes of material from Die Another Day, which opens Nov. 22 in theaters. The Bond mailer warns that "once removed from its packaging, the DVD will self-destruct in 36 hours!"
The line might have been better used by Paramount for marketing Mission: Impossible. Still, the technology allows MGM to send the music video of Madonna's theme song along with numerous featurettes about the film's cars, crew, gadgets and more without undercutting their long-term value for inclusion in the movie's inevitably huge DVD release next year.
The Flexplay technology uses special coatings when creating discs that, when exposed to air, causes them to become unusable after a preselected time period. Because a DVD player's laser is precisely calibrated to shine through a disc's protective plastic sheathing at a specific angle and read information pitted onto the underlying aluminum plate, any change in the sheathing affects the disc's readability. Depending on which coatings are used, the discs remain usable eight to 60 hours before the plastic deteriorates, making it impossible for a laser to read the disc, said Flexplay CEO Alan Blaustein.
Flexplay has pushed the technology for promotions and music, scoring deals to include Flexplay discs full of music videos with the official program of MTV's Video Music Awards Latin America. Atlantic Records is the first music label to create a Flexplay-based promotional version of Nappy Roots' DVD.
The company also is touting opportunities for single-use DVD movies priced at rental rather than sale levels, though Blaustein said the company won't pursue that possibility initially because of its modest resources. Such a product could tap impulse buyers waiting in line at drug and grocery stores for instance, expanding the already huge market opportunities for DVDs with a cheap, single-use alternative that doesn't require the infrastrucutre of a video rental store.
The concept echoes Divx, the failed venture backed by Circuit City Stores and a Hollywood law firm. Divx used on-disc software to encrypt DVDs and special players with an Internet connection to manage billing and decryption. Unlike Divx, Flexplay discs work in any regular DVD player, Blaustein said.
The New York company is privately held, raising "several million dollars" since its 1999 founding from investors led by GE Capital. Blaustein credited co-founder Art LeBlanc, a replication business veteran, as the main developer of the chemical coatings that cause the discs' timed degradation.
The technology faces some potential downsides, such as the environmental consequences of no-longer-playable discs. The company hired an environmental consultant whose analysis said if Flexplay discs comprise 10% of the DVD market, they would eliminate air pollutants equal to 82,000 cars but generate solid waste equal to 4,900 households. The company is trying to devise ways to recycle used discs.
Reported by Daily Variety for Reed Business Information
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