DVD-Video titles are usually encoded from digital studio master tapes to MPEG-2 format. MPEG-2 offers greater overall compression than MPEG-1 and yields a much sharper, cleaner picture. MPEG-2-encoded video commonly uses 480 horizontal lines per frame (720 x 480 pixels), versus 425 lines for laserdisc and 250 to 270 lines for VHS video.

A single-sided (DVD-5) DVD-Video disc was designed to hold a typical feature-length movie – which averages 133 minutes. MPEG-2 encoding uses lossy compression that removes redundant information (such as areas of the picture that don’t change) and information that’s not readily perceptible by the human eye. The resulting video, especially when it is complex or changing quickly, may sometimes contain visual flaws, depending on the processing quality and amount of compression. With MPEG-2 compression a full-motion image needs a minimum video data rate of 3,500 Kbit/s. Digital surround-sound – centre, left, right left-rear and right-rear directional channels, plus a non-directional subwoofer – requires a further 384 Kbit/s. Add additional storage for dialogue tracks in different languages and subtitles and the required capacity increases to 4,692Kbits – or 586.5KB – for every second of a 133-minute movie (a minimum of 4 Mbit/s being required for high quality results). The sums work out to a total required storage capacity of 4.68GB. Higher data rates can result in higher quality, with almost no perceptible difference from the master at rates above 6 Mbit/s. As MPEG compression technology improves, better quality is being achieved at lower rates.

The net result is that a movie played from DVD-Video should look a good bit better than one played from consumer videotape and generally better than laserdisc, assuming the picture has been encoded with at least a reasonable degree of skill. Furthermore, DVD-Video titles typically support multiple aspect ratios, allowing the viewer to choose from at least a couple, such as 16:9 letterbox, wide-screen formats and a more conventional 4:3 ratio. Furthermore, DVD-Video titles also typically let you choose from up to eight different languages and from 32 different sets of sub-titles.

For a dual layer disc (DVD-9) capacity increases to 240 minutes. A double-sided disc (DVD-10) will hold slightly more at 266 minutes, but the disc needs to be turned over to play the other side. Many DVD movies have taken advantage of double-sided discs by putting a version formatted for a normal TV or monitor with a 4:3 aspect ratio on one side and a widescreen version formatted for 16:9 aspect ratio on the other.

There are two ways of writing the DVD data layers: parallel track path (PTP) and opposite track path (OTP). In PTP discs both layers read from the inside of the disc to the outside, whereas in an OTP disc the outer layer reads from the inside to out, and then back in for the inner layer. This allows the drive to read both layers almost continuously, with only a short break to refocus the pickup lens. This is especially useful for DVD movies, where long play time without interruption is needed.

In 1998 the spectre of another VHS vs Beta-type confrontation in the DVD arena was raised when Digital Video Express (DVE) – a partnership a partnership between one of the largest US electronics retailers, Circuit City, and a prominent Los Angeles entertainment law firm – announced an alternative movie format to DVD-Video. Known as DIVX, the rival format took a pay-per-view approach to viewing movies and quickly garnered the support of leading studios Disney, Paramount, Universal and MGM.