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According to recent figures from the Consumer Electronics Manufacturers'
Association (http://www.cemacity.com), video sales for 1998 have made
huge gains in just about every category compared to sales for 1997.
Since the advent of both digital television and DVD, experts have been
predicting a decline in sales for VCRs and color TVs, but CEMA says
it's just not happening.
A total of 42,800 DVD players, including combi-players, shipped to
dealers in April of this year, a 27% increase over the same month in
1997. So far this year, 149,500 players have been sold, a healthy
start for 1998. However, experts are still predicting that DVD-ROM
drives will number in the millions within the next few years, a number
that DVD players aren't likely to reach in the same timeframe.
According to predictions from Strategy Analysis, DVD video will make
up about 11% of the overall DVD market in 2005. But we've certainly
experienced overly optimistic projections before, so who knows?
Meanwhile, CEMA says that big-screen TVs (30 inches diagonal or bigger)
saw a 40% gain in sales in April and that well over a million VCRs
reached dealers. Projection TVs also jumped 33% in April. Someone out
there isn't waiting for digital TV to hit before they buy a new set.
But while hardware sales seem to be substantial, the software side of
DVD has taken a few jibes in the last month. Though sales are still
extremely strong--in fact, nearly 2 million discs have been sold
during this year, according to VideoScan figures from the week of May
8, 1998--studios have been criticized of late for not being able to
deliver the number of discs dealers order. The recent controversy
stems from MGM's DVD blockbuster TOMORROW NEVER DIES, which
broke the record previously held by AIR FORCE ONE for the number of
preorders on DVD. After penning a press release announcing that MGM's
preorders for the Bond flick had "shattered all previous sales records
for a home video rental title," the studio was unable to fulfill the
almost 200,000 DVDs dealers ordered for the movie's May 12 release
date. Most distributors complained that MGM sent them only partial
shipments. The studio said that orders outnumbered supplier goals and
that it simply couldn't press enough discs in time. A similar problem
plagued the releases of THE JACKAL and L.A. CONFIDENTIAL, with
some distributors receiving half of the discs they ordered. Though the
record-breaking numbers bode well for DVD, keeping dealers happy with
complete orders should be a priority, too.
And dealers need to get a little confidence boost, according a recent
study from Neretin Associates that polled 173 major consumer-electronics
dealers. The survey revealed that dealers are taking a reserved approach
to DVD because of possible confusion caused by Divx, a lack of promotional
support from manufacturers, and high player prices.
Compared with Neretin's report from last year, dealers are far
more realistic in their outlook. In 1997, dealers were expecting
to sell a million players and 20 million discs, while this year
revealed that they are estimating sales of about 500,000 players
and about 6 million discs, according to the report.
The report added that even though dealers aren't expecting a windfall,
DVD has helped bring more people to stores and has, in turn, boosted
the sales of other consumer electronics products, which is certainly
reflected in the previously mentioned figures from CEMA.
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