DVD sales, rental growth slows in 2005: group

LOS ANGELES (Reuters) – The growth in DVD sales and rentals
slowed dramatically last year as the home video format started
showing its age, according to a report released on Thursday by
the Digital Entertainment Group.

Sales and rentals of DVDs in 2005 rose 8 percent to $22.8
billion, the industry trade group said, with DVD retail sales
up only 5 percent in dollar terms to $16.3 billion in 2005 and
unit sales up 10 percent.

Consumers spent another $6.5 billion renting DVDs, up 14
percent over last year, the group said.

The category increases mark a sharp slowdown from prior
years’ spikes. For instance, sales of DVDs, which were first
introduced in 1999, rose 33.6 percent in 2004 to $15.5 billion
from $11.6 billion in 2003.

Aiming to reignite interest in the sector, the electronics
and movie industries are preparing to launch this year
next-generation DVDs and players that will feature greater
capacity and interactive features.

Including sales and rentals in the older, disappearing VHS
format, dollars spent on home video were actually down slightly
in 2005 at $24.3 billion from 2004′s $24.5 billion, according
to the group.

By contrast, total consumer spending on home video,
including rentals and sales for both DVDs and VHS, rose 8.9
percent in 2004 and 10.8 percent in 2003.

The group said an estimated 37 million DVD players were
sold to U.S. consumers in 2005, with nearly 17 million DVD
players sold in the fourth quarter alone.

Since launch, more than 164 million DVD players —
including set-top and portable DVD players,
Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination
players — have been sold, bringing the number of DVD
households to 82 million.

The Digital Entertainment Group promotes the benefits
associated with DVD on behalf of various electronics makers and
film studios, including News Corp.’s 20th Century Fox Home
Entertainment, Time Warner Inc.’s Warner Home Video and others.