Spending on video drops

Decline due to drop in price of DVDs

LONDON — Consumer spending on video in Europe fell 1.7% last year to €12.8 billion ($15.7 billion) — the first fall since 1999 — because of a steep decline in the price of DVDs and the collapse of the VHS market.

The average DVD price dropped 11% to $18, down from $31 five years ago, according to a report on the European video market published by Screen Digest.

By contrast, U.S. spending grew by 2.2% in 2005, the Japanese market by 4.4%.

The volume of European DVD and video sales rose 7% to 732 million in 2005, but rental transactions were flat.

Report author Paul Callaghan expects the VHS format to die out completely in most European countries in 2007 or 2008 while DVD sales grow, albeit at a slower rate than before.

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