Annual DVD Sales On Pace For 13M

PORT WASHINGTON, N.Y.— Almost 4.3 million DVD players have been sold during the first half, compared to 6.7 million sold during all of 2000, and overall sales could reach 13 million by the end of the year, according to NPD Intelect Market Tracking.

Annual unit sales of DVD players since 1998 are: 1998, 697,432; 1999, 3.09 million; 2000, 6.7 million; and 2001's first half, 4.3 million.

"It took 25 years for the VCR to become ubiquitous in the American home. By current projections, it should take the DVD no more than 10-12 years," said Tom Edwards, NPD Intelect analyst.

The main drivers for the surge in sales are a reduction in the average selling price and improved picture quality when compared to VCR technology. The average selling price fell to $192 in July 2001, compared to $504 in July 1998. Also, DVDs feature 550 lines of resolution versus 240 lines of resolution for videocassettes.

Other reasons for the popularity of DVDs include:

• Superior sound (Dolby Surround vs. VHS stereo sound);
• DVDs are more durable and less vulnerable to damage (DVDs do not degrade over time);
• Searching is substantially faster, and DVD discs never need to be rewound;
• DVD movies may include special features such as trailers, director and/or actor commentaries, outtakes, etc.

Interestingly, consumer demand for the DVD player has produced a ripple effect among the home theater categories. With the purchase of DVD players, many consumers are upgrading their televisions and their sound systems, thereby increasing the sales of other consumer electronics such as digital television sets and PVRs (Personal Video Recorders).

"Despite the tentative economic consumer outlook, soaring sales of DVD players have not yet hit their potential," Edwards said. "Recordable DVD is just becoming available. The future will see DVD players with PVRs coming into play to combine the best of all worlds — recording of broadcast, cable or satellite programming, plus the enjoyment of purchased or rented video software.

"Just like DVD players, PVRs will eventually decrease in price, giving consumers more choices when it comes to recording and opening up another space in the American living room. Add broadcast signal delivery, and you may never have to leave the living room," he added.

For more information, visit www.intelectmt.com.