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Tuesday, April 01, 2003
Adobe expands to fast-growing DVD market

Desktop publishing software maker Adobe Systems Inc. is expanding into the fast-growing DVD market with a new program designed to make it easier to customize the discs on a personal computer. The maker of the popular Acrobat and Photoshop programs plans to announce its bid to profit from the DVD boom Monday. The software, called ``Encore,'' won't be sold until the summer. Adobe isn't selling a version for Apple's Macintosh.

With a suggested retail price of $549 per copy, the Encore software isn't meant for the mass market. The program promises to create slick DVDs for video entrepreneurs and aficionados, a segment that falls into a cross-section sometimes called ``prosumers.''

With PC-compatible DVD recorders now available for $300 to $500, more people are trying to create their own discs on their computers. The declining prices are one reason the number of DVD recorders in homes and businesses is expected to rise from 6 million in 2002 to 16 million by the end of this year, according to industry research firm IDC.

Recordable DVDs are becoming a more popular media format because their storage capacity is up to 28 times greater than recordable CDs.

Adobe's fingerprints are already on many homemade DVDs because its other programs, including Photoshop and it video editing software, Premiere, are frequently used in the production process. ``It makes perfect sense for Adobe to have a product'' like Encore, said digital media analyst Wanda Meloni of M2 Research. ``This is a void that they needed to fill.''

Adobe believes Encore already has a built-in market among the 1 million registered users of the Premiere software, said Giles Baker, the company's DVD product manager. The software will be competing against other lower-priced DVD software. Rival products include Pinnacle Systems' Impression-DVD Pro, with a suggested retail price of $399, and Ulead's DVD Workshop, with a suggested retail price of $495.

Adobe has been seeking new niches for its software in a bid to recover some of the revenue that has evaporated in the unrelenting high-tech slump of the past two years. The company generated sales of $1.16 billion in its last fiscal year, a drop of $101 million, or 8 percent from the pre-bust level.

The DVD industry has been one of tech's few bright spots, growing faster than any consumer electronics segment in history. About 40 million U.S. households own DVD players and millions more are expected to join the crowd this year with the prices for basic players now below $100.

As the players become more prevalent, more people are expected to become interested in producing personal DVDs featuring vacations, weddings and other family events. The Encore software features tools to create DVD menus and links, similar to the features on commercial discs. The program isn't designed for copying commercial DVDs, Adobe officials said.

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