All parties in this consortium had a vested interest in the future of home video, from either a hardware or software perspective. Software developers had been distinctly underwhelmed with the thought of a next-generation video system that offered little more performance than standard VHS and considerably lower video and audio quality than the (even then) well-worn analogue LaserDisc system. These same parties were also understandably concerned that any next-generation format also carry next-generation copyright protection. Hardware producers felt that any new product would need to be a significant improvement over any existing product in order to generate hardware sales and attract buyers.

The following year a 'wish list' of features to be included in this proposed format was decided upon following the recommendations of an advisory committee established by Hollywood's major players. This committee recommended a system capable of producing at least 133 minutes of high quality video, stereo and multichannel (six-channel) audio capabilities, multiple audio and subtitle tracks, dual aspect ratio compatibility (1.78:1 and 1.33:1) and a series of advanced copy protection systems.

Things began to heat up in December 1994 when Sony and Philips announced the development of the MMCD (Multimedia CD) disc to meet these requirements. MMCD discs held up to 3.6GB of data per layer and used the better MPEG-2 video compression format. The MMCD format also used numerous technologies that were covered by Philips and Sony’s existing technology patents, which would ensure a steady revenue stream for both parties if adopted.

One month later in January 1995, Toshiba and Warner Brothers announced their response, a format called SD (Super Density). SD's data capacity was greater, up to 18Gb compared to MMCD's 7.4GB, and it was based around technologies that weren’t covered by Sony or Philips’ patents. In light of the potential profits involved, neither consortium were willing to endorse the others’ system and for the following nine months there was a real possibility the introduction of a new high-quality digital video/data format might dissolve into another VHS/Beta war, or even grind to an unceremonious halt. Luckily, growing press and industry concern eventually led IBM and several of Hollywood’s major studios to step into the fray and exert pressure on both sides to settle on a common format. The studios had a vested interest in ensuring the format was brought to the market within a reasonable timeframe, and IBM were keen to ensure that any format chosen was compatible with future IBM optical devices. This pressure prompted a new round of talks resulting in a compromise that satisfied all parties, and the new hybrid format was settled on in September 1995 at the IFA in Berlin.

At the same time a new industry regulatory body, named the DVD Consortium, was established consisting of all companies involved in the SD and MMCD formats. The new format was formally announced in December 1995. The new high density disc was officially dubbed 'DVD', although exactly what these initials stood for remained uncertain. The format’s specifications weren’t finalised until September 1996 when the DVD-Video and DVD-ROM Specifications Version 1.0 document was published. The following month DVD-Video's copy protection was finalised, paving its way for release.

The new DVD format was much closer to the Toshiba SD proposal than the MMCD system (the DVD format is, essentially, a tweaked variant of the SD format), incorporating multiple bonded layers, dual sided disc capability and up two data layers per disc side. Several Sony/Philips elements, such as their MMCD format’s signal modulation system were added to the format, ensuring that all parties would get a piece of the royalties pie, but little of MMCD's fundamental technology was transferred into the DVD format. In November 1996 the first DVD players went on sale in Japan, and a few months later in March 1997 made their US debut. As two of the major players behind the new format were also major content producers, discs from Warner Home Video and Columbia TriStar (owned by Sony) were available for the format's introduction and bolstered the format while the other studios dithered about support for DVD. The rest, as they say, is history as the DVD went on to become the most successful consumer electronics launch in history, far exceeding the sales chalked up by the original CD format back in 1982/3.

At first glance a CD and DVD are very similar. Both are the same physical size (120mm in diameter, 1.2mm in depth). That, however, is where the similarities end. CDs consist of a single layer, whereas DVDs comprise two 0.6mm bonded polycarbonate layers. The spirals of data on a DVD are also more tightly packed and the data pit length half that of a CD. As a result of these differences, the laser used to read a DVD is much narrower (650/635nm as opposed to 780nm on CD). DVDs also spin at more than twice the speed of a CD. This speed increase and pit/spiral difference results in a maximum data transfer-rate of up to 10.08Mbps from DVD-Video, over seven times the capability of CD at 1.4112Mbps.

DVDs come in a variety of sizes, or densities. The most common are:

• DVD-5,
• DVD-10,
• DVD-9, and;
• DVD-18

The basic single layer, single side variant is known as a DVD-5 and stores up to 4.7GB of data. Dual-sided DVD-5s are known as (surprise) DVD-10s. A dual-layered single-sided DVD is known as a DVD-9 and contains up to 8.54GB of data. The second layer of data on a DVD-9 disc (called layer 1) contains slightly less information that the first layer (layer 0), as the data pits are spaced slightly further apart. This increase allows more accurate reading of the second layer through the first data layer and the transparent glue used to bond the two data layers together. A dual-layered, dual-sided disc is known as a DVD-18, and can contain up to 17.08GB of data. DVD-18 discs use a slightly different and much more difficult construction technique than that used by DVD-5, 9 or 10 discs (see the Home Theatre Glossary). DVD-18 discs are still relatively uncommon due to limited production facilities and higher production failure rates caused by its manufacturing difficulty. Various other densities are also available, including hybrid DVD/CDs and DVD-14 dual-layer/single-layer hybrids, but these are extremely uncommon.

Video on DVD-Video is compressed using either the MPEG-1 or MPEG-2 video compression format, although the use of MPEG-1 is extremely rare. The maximum video bitrate for MPEG-2 compressed video content on DVD is 9.8Mbps (megabits per second), with possible frame sizes of up to 720x480 (width x height) pel (NTSC) or 720x576 pel (PAL). Supported frame rates are 24, 25 or 30fps (frames per second). Horizontal picture resolution on DVD is roughly twice that of VHS (240 NTSC, 260 PAL) and slightly better than LaserDisc (420 NTSC, 440 PAL).

Audio on DVD-Video is presented via:

• PCM (Uncompressed. Up to 24-bit 96kHz resolution, consuming 4.608Mbps),
• MPEG Multichannel (Up to 912kbps. Extremely uncommon and generally restricted to European discs),
• DTS (Up to 1509kbps), or;
• Dolby Digital (Up to 448kbps).

PCM on DVD is able to reproduce a maximum of eight channels of audio, but currently available decoding hardware is generally only designed for two-channel audio. DTS supports up to seven channels, although commonly only six are used. Dolby Digital currently supports up to six channels. Sony’s SDDS system is an optional audio format, but has not been utilised and is unlikely to be used in the future. DVD-Video supports up to eight audio streams, comprising any combination of the four main audio formats, although the maximum data-rate available for all combined soundtracks is 6.144Mbps.

DVD-Audio uses a lossless compression system developed by Boothroyd Stuart Meridian called Meridian Lossless Packing or 'MLP'. This system is used to losslessly store PCM audio at very high resolutions. MLP on DVD-Audio is capable of reproducing up to two channels of 24-bit 192kHz resolution audio, vastly superior to CD, consuming 9.22Mbps; or up to six channels at 24-bit 96kHz resolution.

Up to 32 subtitle tracks may be included on a DVD, with four colours available at any one time and a maximum subpicture bitmap size of 720x576. Consequently, an entire frame may be occupied by subpicture information if desired. This allows elaborate fullscreen subtitled material, such as animated text or graphics as used by New Line’s Infinifilm line and Columbia TriStar’s Men in Black and Ghostbuster titles. Active subtitles are also supported, allowing 'hotspot' linking of text and graphics to various data sectors of a disc (as used in Warner Brothers’ Matrix disc for its 'white rabbit' feature, for example).