"No new tech has gotten 6% market penetration in it's first 6 years"(what about VCD?)................................
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IRMA Report: 800,000 DVD Players In Households By Year-End
- -August 24, 1998
By Steve Smith
DVD video player household penetration in North America will be 800,000 units by the end of the year, according to the International Recording Media Association's (IRMA) Worldwide Optical Media Intelligence Report.
The report was presented by IRMA executive VP Charles Van Horn at the organization's first annual DVD Production '98 seminar for movie studios and replication executives held at Universal City, Calif.
As with any new technology, Van Horn said, "audiences are slow to change with introduction of new technology. Look at 2002 as only the beginning of the format's introduction to the consumer mass market."
However, the report is bullish on DVD's prospects. Van Horn said, "In consumer electronics history no new technology has gotten more than 6% household penetration within five years of its introduction. DVD may be the first to do that."
IRMA's report projects that household penetration of DVD Video decks will be 7% in North America, 8% in Japan and 5% in Europe.
Among other findings of the report:
* Over 800,000 North American households will have DVD Video decks this year, which is expected to grow to 8.6 million households by 2002.
* North American DVD Video replication will be increasing from 40 million units in 1998 to 183 million in 2002.
* The number of stores selling or renting the format will increase from the 5,000 doing so by the end of 1997 to more than 12,000 by the end of this year.
"Sensible retailing and marketing will make DVD more apparent to all consumers, not just early adopters -- who are acquiring DVD Video programs at an annual rate exceeding VHS sell-through buy rates, of 15 to 20 DVD Videos versus 10 to 15 VHS videos," Van Horn said.
Home video executives voiced an even more bullish attitude on DVD Video during a presentation at DVD Production '98. Emiel Petrone, executive VP of Philips DVD Entertainment Group and chairman of the DVD Video Group, moderated the panel.
In his opening remarks, Petrone said that DVD Video player shipments to dealers have hit 750,000 to date and will reach 1 million by the end of the year. "Player sales were 88,000 in July, more than 20,000 higher than June," he said. "We are above projections for the year."
Panelists discussing the appeal of DVD Video to consumers were: John Powers, DVD marketing director, Warner Home Video; Jeff Fink, president of sales, marketing and distribution, Artisan Entertainment; and Leslie Cohen, VP, Sony Music Entertainment.
Powers of Warner said he was "pleased to be on a panel talking about DVD's success, versus some of the panels we've had during the past couple of years, wondering when it will be released." Warner and its affiliated brands will have over 300 titles in the market by the end of the year, he said.
The Warner exec also explained that his company's recently announced three-tier pricing structure "helps retailers to set sections and selections" in their stores. Warner's strategy, he said, is "to try and offer widescreen and pan-and-scan formats on new releases. With catalog product, we release those on the last Tuesday of the month so retailers can promote them together."
Artisan's Fink, meanwhile, said a blockbuster such as its Terminator 2, with sales of over 150,000 units, "lends itself to DVD. In fact, our people say that T2 can test your home theater system" based on the number of features you can put into a DVD title. Artisan currently offers 30 DVD titles and plans to release two or three every month.
"Our consumer surveys show that people like 5.1 Digital Dolby audio, interactive features, director's comments and behind-the-scenes features," Fink detailed. "They like letterbox first, then 16 x 9 video."
Cohen of Sony said that by the end of the year the company will offer over 50 music videos in DVD. "New and existing Sony music titles will offer 5.1 Dolby Digital and PCM audio quality, subtitles, artist biographies, discographies, and promotional videos," she said. |
