DVD PENETRATION NEARS 85 MILLION HOUSEHOLDS

Home Video Sales Stable For First Half of 2006
With Both Player and Title Sales Relatively Flat


      LOS ANGELES ( July 11, 2006) – DEG: The Digital Entertainment Group (DEG) released its mid-year industry update for DVD player and software sales at the VSDA’s Home Entertainment 2006.  The figures show a mature industry with stable sales for the first half of the year.  According to figures compiled by DEG, based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, nearly 14 million DVD players were sold to consumers in the U.S. in the first half of 2006, virtually the same as last year.

     Since launch, more than 175 million DVD products, including set-top and portable DVD players, DVD recorders, Home-Theater-in-a-Box systems (HTIB), TV/DVD and DVD/VCR combination players, have sold to consumers, bringing the number of DVD households to more than 84 million (adjusting for households with more than one player).  Approximately 52 percent of DVD owners have more than one player, reflecting the growing popularity of HTIB systems and other lifestyle products.

U.S. DVD HARDWARE SALES (in millions)

QUARTER
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
1st Quarter
.030
.094
.358
1.350
2.220
3.565
4.858
6.855
7.741
7.567
2nd Quarter
.079
.149
.611
1.435
2.404
3.750
5.506
6.057
6.006
6.676
3rd Quarter
.077
.244
.880
1.550
2.537
4.740
6.470
6.593
6.250
 
4th Quarter
.119
.459
1.701
5.542
9.501
13.058
16.900
17.621
14.343
 
YEARLY
TOTAL
.305
.946
3.550
9.877
16.662
25.113
33.734
37.125
34.390
14.528
TOTAL
(since launch)
 
 
 
 
 
 
 
    175.945

*Includes set-top and portable DVD players, Home Theater in Box systems, TV/DVD and DVD/VCR combination players
DEG: Digital Entertainment Group


     “What we’ve seen in the first half of the year is a natural, expected slowing of DVD sales,” said Steve Nickerson, DEG Communications Committee Member and Senior Vice President, Market Management, Warner Home Video.  “DVD sales are virtually flat, consumers in some 85 million U.S. households continue to enjoy their DVDs beyond the living room into every room of the home, as well as into cars and a variety of portable devices for use on the go.  The industry is also seeing growth from such genres as Music DVD and special interest films, including documentaries, as evidenced by the impressive array of titles available from expanded distribution channels.”

     In the first half 2006, more than 740 million DVDs shipped to retail according to figures compiled by Kaplan, Swicker & Simha on behalf of the DEG. This represents a slight drop of four percent when compared to last year's shipments of 772 million units. The total number of units shipped since the launch of the DVD format is 6.3 billion discs. There are now more than 60,000 DVD titles available to consumers.


NORTH AMERICAN DVD-VIDEO SOFTWARE SHIPMENTS (in millions)

QUARTER
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
1st Quarter
N/A
3.3
11.1
29.0
69.2
120.1
231.7
332.2
403.0
395.8
2nd Quarter
N/A
4.1
13.9
33.2
81.7
152.2
195.5
316.8
369.1
346.1
3rd Quarter
2.3
5.9
29.0
42.7
75.9
153.3
214.6
340.9
347.9
 
4th Quarter
3.2
11.8
44.0
77.5
137.6
259.4
381.5
528.4
536.7
 
YEARLY TOTAL
5.5
25.1
98.0
182.4
364.4
685.0
1,023.3
1,518.3
1,656.9
741.9
TOTAL SHIPMENTS
(since launch)
 
30.6 
 128.6 
 311.0
675.4 
1,360.4 
2,383.7
3,902.0
5,558.9
6,300.8

Figures compiled by Kaplan, Swicker & Simha on behalf of DEG: The Digital Entertainment Group


    DEG: The Digital Entertainment Group is a Los Angeles-based, industry-funded nonprofit corporation that advocates and promotes the many benefits associated with DVD while providing updated information regarding the format to both the media and the retail trade. The DEG offers a forum for member companies to engage in ongoing discussions concerning various issues and opportunities, which relate to other new digital technologies that may emerge in the future.

    Regular members of the DEG are Anchor Bay Entertainment, Buena Vista Home Entertainment, D&M Holdings, DTS Entertainment, EMI Recorded Music, Hewlett-Packard, Image Entertainment, JVC Company of America, Lionsgate, MGM Home Entertainment, New Line Home Entertainment, Panasonic Consumer Electronics, Paramount Home Entertainment, Philips Consumer Electronics, Pioneer Electronics (USA), Sony Electronics, Sony BMG Music Entertainment, Sony Pictures Home Entertainment, Thomson, Toshiba America Consumer Products, Twentieth Century Fox Home Entertainment, Universal Music Group, Universal Studios Home Entertainment and Warner Home Video.

    Associate members are AGI Media, Ascent Media/Blink Digital, Clear-Vu, Deluxe Digital, Deluxe Media Services, e2amp inc., Giant Interactive, JVC Disc America, Kestrel Wireless, Macrovision, Memory-Tech, Netflix, Panasonic Hollywood Lab, Sonic Solutions, Sonopress, Sony DADC, Technicolor and Universal Operations Group.

    Interested consumers can reach the DEG at 310-888-2201, via e-mail at getinfo@digitalentertainmentinfo.com or through its web site at www.digitalentertainmentinfo.com.


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