DVD is the outcome of a battle between two formerly rivaling camps of optical data discs, each supporting the MMCD (Multimedia CD) and the SD (Super Density) formats. The MMDC and SD proposals featured different error correction, modulation, disc structure, etc., but targeted identical markets. Wisely, the two camps merged and agreed on a third format, that was a mix of the other two. The DVD, initially, addressed only movie player applications, but the nature of the medium has attracted other applications, too. In light of the increasing number of possible applications of the new disc format, it was therefore renamed to Digital Versatile Disc. The DVD consortium intends to position the DVD as a high-capacity, multimedia storage medium. A total of nine working groups in the consortium elaborate on various technology specific topics, such as video, ROM applications, audio-only systems, and copyprotection.

The movie player application remains the DVD’s reason for being, but there’s a chance that the DVD may also take over a huge share of the CD-ROM market. The promoters of the format agreed in December 1995 on a core set of specifications. The system operates at an average data rate of 4.69 Mbit/s and features 4.7 GB data capacity, which allows MPEG-2 coding of movies, or which may be used for a high-resolution music disc. For the PAL and NTSC specifications of the DVD, different audio coding has been chosen to obey market patterns. For the NTSC version, the Dolby AC-3 coding will be mandatory, with MPEG audio as an option, whereas the opposite is true for PAL and SECAM markets.