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Analyst: DVD Still to Be Big Part of Home Entertainment in 2010

21 Jun, 2006 By: Jessica Wolf

The U.S. home entertainment market is mature and changing, but by 2010 will grow to $30 billion, with standard DVD still bringing in the biggest haul, according to Understanding & Solutions research.

DVD's piece of that $30 billion pie will be more than $15 billion, according to projections presented by Alison Casey, business director for Understanding & Solutions at the Entertainment Supply Chain Academy 2006 conference in Los Angeles today.

High-definition discs will garner about $10 billion by 2010, a third of the total market, she said.

And electronic sellthrough and rental will have begun etching out their near 10% chunk of the market with about $5 billion, she said.

“A lot of people think that's a bullish estimate,” she said.

The fact is, consumer behavior does not change overnight and digital delivery will coexist with packaged goods for some time, she said.

However, Casey added that her company expects by the end of this year up to 10 new “high-profile” players will enter the digital movie delivery sphere. Download-to-burn options for major motion pictures should arrive by mid-2007, she said.

And look for the changing video atmosphere to bring new retail players to the video table, Casey said.

“They want to be involved; they want to get a piece of the action,” she said.

Retailers are already starting to experiment with in-store burning options like kiosks, she said.

These are attractive because of the obvious shelf space issues retailers are facing with 55,000 DVD titles in the market, nearly 12,000 released in 2005 alone, she noted.

Retailers especially like the idea of using in-store digital solutions to manage unpredictable catalog-title inventory, she said.

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