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There was another reason for the rapid rise and success of DVD: Copy protection. By the mid 90's the studios were getting more and more upset and concerned that no home video releases had any sort of strong copy protection. Sure VHS had Macrovision but there were already many inexpensive ways to defeat that. Once the DVD format was announced, it had everything the studios wanted:
Purely digital content that would not degrade based on the number of plays,
(perceived) higher quality than laserdisc,
copy protection both in the analog realm (Macrovision) and the digital realm (CSS encryption)
easier to manufacture than laserdisc
True on demand access to various bonus content (unlike laserdisc which was limited to chapter stops and still frames only in CAV mode)
smaller footprint meant cheaper distribution
5" standard disc size meant combo players could be designed and sold to the public.
Content could be accessed on a computer with a computer DVD drive.
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