Analysts cast an eye on DVD and predict surpassing of VHS in 2003

Here’s an interesting snippet of news we have received this morning regarding the fast growing DVD market. Its growth rate has gotten some serious attention and now analysts predict a phenomenal future for the format.

US sales of DVD software will reach 57 million discs this year, worth $1.5 billion, and by 2005 more than 1.3 billion discs will be shipped annually,
worth $36 billion. Annual sales of DVD devices will reach 9.1 million units in 1999, a growth rate of 128%, and will continue to soar, reaching 52 million by 2005. These findings are presented in “World DVD Planning Report”, recently released by Strategy Analytics, Inc.“s advisory service, ”The Interactive Home’.

TV-based DVD video players are becoming the format of choice for movie fans and videophiles. DVD also will become a standard feature of home PC systems within the next year or so. New games consoles from Nintendo and Sony will also be DVD-based, DVD Audio will soon be launched for the hi-fi market, and DVD video recorders are around the corner.

The report predicts that 11% of US homes will own at least one DVD device by the end of 1999, and 58% by 2002. DVD PCs currently account for 75% of the installed base, but this share will fall to 59% by 2002 as TV-based DVD becomes more widespread. In spite of the relatively low penetration (4%) of DVD video players (90% of households own a VCR), the shift from VHS to DVD software will happen quite rapidly, since early DVD owners are the avid movie and video enthusiasts who account for a major share of pre-recorded video sales and rentals.

Thorough analysis of historical software buying patterns combined with ownership projections for all types of DVD device has enabled the analysts to develop detailed sales projections for DVD Video, ROM, games and audio software. Video titles currently account for over 90% of the software market. By 2005 their share will have fallen to 43%, while DVD-ROM will account for 28% and games formats 24%.

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