Two giant companies are developing videos of cinematic quality. Steve Homer reports
The next time you rent a video you will watch a terrible picture. That is less a reflection on your taste than on videos: if you could see the original and the taped version side by side, the recorder's VHS picture would look awful. The problem is that the analogue videotape cannot store as much data as is present in the picture. Worse, the quality tends to degrade with time.

But next year will see the biggest shake- up in sitting-room electronics since the arrival of the video cassette recorder. Digital video disc (DVD) will provide movies with pictures at higher quality than on VHS, with compact disc-quality sound. These will come from discs the same size as a CD, which store their data in the same way. Breaking a TV picture down into bits, like a computer screen's pixels, makes for a perfect copy that will never degrade. Even better (for film companies), pre-recorded discs are easier to make in volume than tapes.

The new discs will require new players. But they will be able to play not only the new DVDs, but also music CDs and the existing Video CDs, launched last year, which can store up to 74 minutes of film action on a disc. DVDs will offer more than two hours of video on one disc.

The industry hopes we will notice the difference in the DVD image, even on ordinary TVs, and like it so much that we consign the VHS tape to the technological scrap heap. But in what has become almost standard practice for the consumer electronics industry, two rival camps are pushing incompatible standards, and gearing up for battle. Echoes of the video cassette war between the VHS and Beta formats resound.

On one side are Philips and Sony, developers of the CD, teamed with 3M. On the other are Time Warner and Toshiba. Both teams propose solutions based on CD-sized discs and offering high-quality images; there, the similarity ends.

Time Warner/Toshiba say they will launch their DVD in mid-1996, with a player costing "the same as a high-end video recorder". Philips/Sony say they will launch in 1996 but will not be drawn on a price. But which is Beta and which VHS? It's not clear: JVC, the company that invented VHS for the domestic market, is currently backing both formats.

The opening skirmishes began last December, when Philips/Sony publicly announced their so-called MultiMedia CD, which, taking advantage of the improved technology in today's CD players, would use a disc able to store 3.7 gigabytes (3,700 megabytes) of data - almost six times as much as today's CDs, and enough for well over two hours of high-quality video. For longer movies the companies announced a 7.4-gigabyte disc.

A key to this increased storage capacity was a technique developed by 3M. Called "dual-layer technology", it puts a second semi-reflective layer a few microns above the conventional reflective disc surface. Although this sounds complicated, reading from a dual-layer disc is simplicity itself, and 3M says the discs will cost only about 5 per cent more than a single-layer disc. After first announcing a 10-gigabyte, dual-sided disc, dismissed by experts as impractical, in April Time Warner and Toshiba announced a similar system with a claimed capacity of 9Gb. This was despite having said in January that dual-layer technology "offers scant possibilities of realisation".

Even though television is the big market for DVD, the first battles of the sitting-room war could be fought in the computer world. Philips and Sony were quick to talk to the computer industry, which would be an ideal launch pad for such technology. The multimedia computer market is growing explosively, and sectors such as corporate education and training have deep pockets and would be willing to pay high prices for early models if they deliver tangible benefits. Time Warner and Toshiba have also given themselves a stepping stone into the computer world by linking up with Matsushita, a leading supplier of CD-Rom drives.

As in the video cassette battle, the attitude of the copyright holders - particularly film studios - will be crucial. To begin with, DVDs will not be recordable. That means the format that has most titles available will have a big advantage. So far most of the studios to show support for either camp have been tied to the various parent companies.

The real crunch will come when recordable DVDs are launched in a couple of years. DVD is a perfect cloning technology for movies: unlike today's pirate VHS market, bootleg copies will be as good as legitimate recordings. That means Hollywood will not release films until a watertight copy protection scheme has been introduced. If this problem is cracked, and one camp develops a relationship with the studios that lets it produce a reasonably priced recording DVD system, it will most likely win the day. Then we will be able to watch Neighbours, perfect and undegraded, as often as we like.