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TK's MORNING BUZZ: DVD Sales Are the Glimmer in the Future of Home Video

By : Thomas K. Arnold | Posted: December 07, 2000

With new forms of competition for our leisure hours surfacing all the time, particularly in the area of delivering entertainment into the home, it's reassuring to hear the experts say home video won't be cannibalized, but that the overall pie will get bigger.

That was the underlying message I got at the International Recording Media Association's annual marketing summit, held yesterday at the Universal City Hilton in Universal City, Calif.

A study by merchant bankers Veronis & Suhler concludes that consumer spending on communications--content and access--will grow from $129.9 billion in 1999 to $178.1 billion in 2004, and that home video's share will remain at 15%.

That's a huge net increase for consumer spending on home video, fueled primarily by DVD.

But Veronis & Suhler also had another interesting finding: Despite the growing competition for our leisure hours, consumers will be spending more and more time watching home video, from an average of 55 hours last year to an average of 71 hours in 2004.

Later that day, Jim Bottoms of Understanding & Solutions, one of England's top media consultancies, told me that despite advances in developing true video-on-demand, both over the Internet and via digitalcable/satellite, packaged media will always survive.

"You'll see the pie being expanded," Bottoms said, adding, "if anybody issuffering, it will be broadcast TV."

Bottoms pointed out that consumers are by nature "collectors," and that40% of packaged media sales are for the gift market. "DVD, VHS, CD--those are nice things to give as gifts," he said. "Digital downloads don't have the same appeal."

So there you have it--a glimmer of hope, although I should caution that the home video model that is expected to not only survive, but thrive, in the face of more and more encroaching technologies isn't quite like today's home video model.

You can rule out VHS, and you can pretty much rule out rental as well. DVD sales--that's the future of home video, these experts say, and at least for now it's a future that looks rock solid.

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