DVD to overtake VHS in 3 years, study sez

Units expected in 625 million homes by 2010

Worldwide spending on DVDs will surpass that on videos by 2003 and there will be DVD players in 625 million homes by the end of the decade, according to a study released Tuesday by London-based Baskerville Communications Corp.

“The implication is VHS is kind of a dead duck,” said Bob Marich, senior editor of the forecasting group that releases studies on consumer habits. “The growth of DVD software will continue through this decade despite competition from pay per view, satellite and cable.”

For 2000, it is estimated that total sales of DVD software will be $9.1 billion and $31.8 billion for VHS. By 2010, spending on DVDs will be $64.6 billion versus $2.5 billion for VHS.

The year when the turnover in spending takes place is estimated to be 2003, Marich said, because of the expected release of recordable DVD players in 2001. But this technology may also cause a rift in the sector, according to the report.

No DVD standard?

“Manufacturers introduced a single standard for DVD playback equipment to avoid the VHS/Betamax dogfight,” the study reports. “However, the single DVD standard may collapse as manufacturers introduce different technologies in their recordable players.”

According to the report, 55% of the world’s households that have television will also have a DVD player by 2010. Currently, DVD global penetration is at 3.2%, with the U.S. accounting for about a third of that total, with 10 million homes. By 2010 China will have the highest number of homes with DVD players, at 127 million, which by that time will be 20% of the world’s total.

Baskerville Communications Corp. is in a joint venture with Variety to publish the Variety Deal Memo.

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