Sales of DVD players fuel o’seas disc drive

Report finds households with players to double by 2005

NEW YORK — The DVD biz will have a few more years of feasting thanks to rapid overseas equipment sales growth, according to new forecasts of the global DVD market.

A report by U.K.-based research firm Informa Media Group predicts that the number of DVD households in Europe will almost double by 2005 from today’s base of 46 million, driven by growth in smaller countries with lower DVD penetration rates.

In the Asia-Pacific region, where some 55 million already have a DVD player in the home, penetration should reach 112 million in the next two years.

But this hotly anticipated international hardware buying binge may not be enough to sustain the kind of growth rates to which Hollywood has become accustomed. Study predicts those new buyers of DVD players may be less prolific consumers of film and TV than the early adopters and library collectors that drove initial growth of the format.

Firm predicts global DVD software sales will advance more slowly than equipment penetration, with total retail sales growing from $32 billion worldwide today to around $42.5 billion in annual sales by 2005. That number should reach roughly $48 billion by 2010.

“The global software market has enjoyed a boom over the last five years, but this growth is only expected to last another couple of years,” said Simon Murray, author of the report. “The combined DVD and VHS software market will soon stagnate, though a $57 billion-$60 billion sector is hardly dying.”

The flattening comes as sales of DVD players experience an echo boom as early adopters upgrade to DVD recorders and growth in nations with lower penetration rates in Europe and Asia accelerates.

The Asia-Pacific region will maintain its 35% global share of sales thanks to fast take-up in Japan and emerging markets in China and India. North American global share will fall to 29% in 2004 from 56% in 2000.

By the end of 2009, 478 million homes around the world will have a DVD player, finally surpassing the penetration of VCRs.

Rental revenue will continue its slow decline and is expected to account for 24% — or $13 billion — of DVD software revs by 2010.

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