Last update: June 24, 2005 at 10:52 PM
It's a rental, it's disposable, but this camcorder isn't complicated
Tech ObsessionJune 25, 2005
Can there be a "disposable" video camera?
A $400 digital camcorder is hardly something you'd throw away, but this week a $29.99 simplified digital camcorder debuts at 10 Twin Cities CVS drugstores and is reportedly being test-marketed by Target Corp. in Philadelphia.
In an attempt to appeal to a mass market of people who already buy disposable film cameras, Rhode Island-based CVS hopes consumers will flock to a "one-time-use video camcorder" that you buy, use to film a 20-minute movie and then return to the store.
CVS charges an additional $12.99 to put your movie on a DVD that can be viewed on a TV, a computer or the Internet. The video quality is said to be similar to VHS videotape.
After the camcorder is returned, CVS sells it to someone else, which makes the camcorder essentially a rental. But if the camcorder can't be returned -- either because you dropped it in the lake or got it full of sand at the beach -- there is no security deposit for you to lose and no penalty to pay. You're out only your $30 purchase cost. That makes it a disposable camera in at least one sense.
To prevent anyone from keeping such an inexpensive camcorder, its manufacturer, Pure Digital Technologies of San Francisco, has severely limited its capabilities. The recorded video is encrypted on a flash memory chip inside the camcorder, and the only way to retrieve the movie is to dock the camcorder with a CVS computer server.
CVS said the camcorder would give consumers "a rich, worry-free home moviemaking experience with an affordable single-use camcorder that easily fits in a pocket or purse."
The new camcorder's four-button controls emphasize simplicity at a time when analysts say digital camera sales are on the verge of a slowdown, perhaps because the units are too difficult to use.
CVS, which will offer the camcorders at 4,500 stores nationwide by June 26, has exclusive marketing rights through the end of the summer, after which the videocameras will be available through other retailers, said Simon Fleming-Wood, marketing vice president at Pure Digital Technologies.
Target has just begun its test-marketing of Pure Digital's new camcorder and its still digital camera that was introduced two years ago, Fleming-Wood said. A Target spokeswoman did not return a phone call about the test-marketing effort.
"We expect to sell 1 million of the disposable video cameras in the first 12 months," Fleming-Wood said. Even if 20 percent of the cameras aren't returned, Pure Digital can still make money from camera sales, picture processing fees and sales of the special computer servers that CVS and other retailers need to process the pictures, he said.
Pure Digital's "disposable" still digital camera has sold nearly 1 million units in the past two years, he said. The still cameras cost $15 to $19 at retailers such as CVS, Wolf Camera, Ritz Camera, Longs Drugs and Rite Aid Corp., another drugstore chain. Processing of 25 digital still pictures costs $7 to $10.
To make the digital camcorder attractive to a broad audience more interested in preserving memories than becoming videocam hobbyists, Pure Digital simplified the camcorder so that it has only four control buttons: record, playback, delete and the on-off switch.
"All our research shows that people love video as a medium but find video products very inconvenient to use," Fleming-Wood said. "'To make a DVD disk with most video cameras, you must hook the camera to a computer. Then you need a strong knowledge of computers, DVD authoring software and video file formats. A very small percentage of people know how to do that."
The Pure Digital camcorder hides that complexity, Fleming-Wood said. Consumers never need to know that their DVDs are recorded in three different video formats so the video will play equally well in a DVD player, on a computer or over the Internet. Nor do they need to understand that software on the DVD will upload the video to a Pure Digital website, where a customer's friends and relatives can view it with their computers.
"We're not trying to dumb down digital camcorders so much as keep them simple to meet the needs of people who already use single-use film cameras but want the benefits of digital," such as the ability to create a family DVD movie, Fleming-Wood said.
The introduction of Pure Digital's easy-to-use digital camcorder follows some gloomy analyst predictions about a near-term slowdown in sales of digital still cameras, as well as a current slowdown in sales of digital camcorders.
Analysts contend that digital still cameras will never completely replace their film counterparts because they are too difficult to use. Digital camcorders are even more complex, analysts said.
Worldwide digital camcorder sales revenue is declining this year, following last year's slowdown in unit sales growth, said Chris Crotty, an analyst at iSuppli Corp., a research firm in El Segundo, Calif. The average digital camcorder will cost $414 this year, nearly twice the average $216 price for a digital still camera, he said.
As a result, Pure Digital's strategy of simplifying digital camcorders to stimulate mass-market sales draws praise from analysts.
"Today's video cameras are absolutely too techie for most people," said Chris Chute, an analyst at research firm IDC in Framingham, Mass. "This novel idea of a one-time-use videocamera, combined with burning your movie on a DVD, might resonate with people. But I think the $43 cost is still a little high."
But, simple or not, a one-time-use digital camcorder isn't likely to be as popular as a disposable film camera, said Ross Rubin, an analyst at the NPD Group, a market research firm in Port Washington, N.Y.
"The disposable film camera is really a mass market product that is embraced by all levels of consumers," Rubin said. "But there are fewer consumers who occasionally want to capture a birthday, a holiday or a vacation on video but haven't already bought their own video camera.
