Lower prices, growing consumer demand and the introduction of recordable DVDs could boost the number of players in homes to a better-than-expected 3.5 million by the end of the year, according to a new report released by Nationsbanc Montgomery.
While earlier projections from industry watchers DVD Video Group and the Consumer Electronics Manufacturers Assn. anticipated more than 2 million players to make their way into homes this year (Daily Variety, April 7), Doug Gordon, managing director of Nationsbanc’s consumer hardline retail division said the numbers easily could reach 3.5 million units.
“Our most recent industry checks show expectations for DVD unit sales have increased due to strong carry-over demand from last Christmas,” Gordon said. “We believe … that this is a real product cycle and that it has a long, long, long way to go.”
He added that unit demand will “continue to be strong” because of broadening consumer acceptance, increased availability of the product, rental availability in national video chains and a projected price point of as low as $199 for players this Christmas.
Player sales also are expected to be fueled this gift-giving season by the introduction of recordable DVD devices from major manufacturers for as low as $250.
The report went on to say electronics retailers Best Buy and Circuit City are expected to benefit the most from the surge in sales.
DVD hardware and software sales already account for 2.5% of total sales for the Best Buy chain, while Circuit City attributes 1.5% of its sales to the technology, the report said. Best Buy controls nearly 25% of the market share for the DVD category among electronics retailers.
The report said nothing about the future of floundering pay-per-view rival Divx, which lags far behind DVD in hardware and software sales. Circuit City owns a majority stake in the technology.