To: J Fieb who wrote (36475 ) 10/3/1998 8:49:00 AM From: John Rieman Respond to of 50808
DVD ready to take-off?????????????????????????techweb.com October 05, 1998, Issue: 221 Section: News -------------------------------------------------------------------------------- Price Cuts, New Merchants Boost Sales -- DVD Reaches A Critical Mass Steve Koenig Dallas - Nearly two years after their introduction, DVD players and movies are finally showing signs of reaching a mass audience. "DVD is poised to really take off," said Van Baker, director of consumer-market research for Dataquest, San Jose, Calif. "Prices for DVD players are falling and vendors are finding new and viable channels of distribution." Average street prices for DVD players have declined in recent weeks to about $399, from as much as $1,500 in early 1997, Dataquest reported. As prices for DVD players decreased, unit sales for the players increased. The Consumer Electronics Manufacturers Association reported that 34,000 DVD players were sold in January 1998, and more than double that-81,000 units-were sold in August. Year-to-date sales (through Sept. 11) of DVD players totaled 458,200 units, according to CEMA . Baker attributed the falling prices and accelerating sales of DVD players to greater vendor confidence in DVD technology. "Enough time has elapsed that vendors are feeling confident that DVD is not some passing trend. They know with relative certainty that the [unit sales] volume will be there," Baker said. He added that DVD vendors have cut their prices in order to stimulate market demand. The arrival of DVD at national mass-merchant chains, such as Wal-Mart and Target, is another sign that the format is hitting its stride, industry observers said. About six weeks ago, Wal-Mart began merchandising two DVD player SKUs and approximately 72 DVD movie titles at 1,400 of its locations nationwide. Wal-Mart shoppers can choose either a $369 RCA model or a $449 Philips-Magnavox DVD player. DVD movie titles range in price from $14.96 to $24.95. A Wal-Mart spokesman said the company has been pleased with its DVD initiative and plans to expand distribution to all Wal-Mart locations by year's end. Competitor Target is merchandising four DVD players with an assortment of about 75 movies. Target is promoting the devices by offering two free DVD movies with the purchase of a DVD player through Dec. 31. An assistant manager for Target said his store has sold DVD products for about two months and interest has been greater in the movies than the players. "Hopefully, the free movie promotion will create some draw," the assistant manager said. Target officials declined to comment. Ian Warfield, vice president and general manager of Navarre's computer products division, said street prices for some older DVD movie titles may drop further in Q4 as a result of retailer promotions, which would also fuel sales of DVD players. "It would not surprise me if we saw prices for some DVD titles priced from $10 to $15 during the fourth quarter," Warfield said. For consumers who would rather borrow than buy movies, Blockbuster Video plans to expand its DVD movie offerings to 500 of its 4,000 locations by year's end. The retailer has been testing DVD movie rentals since April. Blockbuster also rents DVD players through a partnership with Philips Electronics. Major film studios are increasingly embracing the DVD format. CRWi reported last week that Steven Spielberg's Los Angeles-based film studio, DreamWorks SKG, ended its DVD holdout on Sept. 24, announcing three titles for the movie format. Meanwhile, sales of DVD-ROM software remain slow, and a very limited selection of titles is available at retail, according to PC Data, Reston, Va. At press time, 14 DVD-ROM software titles-including entertainment and reference applications-were available at retail, according to PC Data. Copyright ® 1998 CMP Media Inc.