Log in
  

Analysts Mixed on Download Impact on DVD

21 Feb, 2007 By: Erik Gruenwedel


Apple TV


Following the effect of Apple's iPod on packaged-music sales, the launch later this month of the $299 Apple TV has some analysts pondering the future of DVD.

Deutsche Bank Securities analyst Chris Whitmore believes Apple TV— the set-top box that promises to deliver broadband movie downloads to the television — could generate upwards of $7 billion in incremental revenue for Apple by the end of the decade.

In a research note, Whitmore said it was conceivable Apple TV as early as 2009 could take 20% to 30% of the $25 billion DVD market.

It is widely considered that Apple's iPod Video content deals with CBS Corp., Lionsgate, Paramount Pictures, 20th Century Fox Entertainment and The Walt Disney Co., among others, could be easily transferred to Apple TV.

Tom Adams, president of Adams Media Research in Carmel, Calif., said consumer consumption of movies and TV show downloads from the Internet will surpass $4 billion in 2011, compared to $111 million in 2006.

In a report released Feb. 21, Adams projects sales of video downloads will top $472 million this year and $1.8 billion in 2008. He says the market will really take off in 2010 with $3.1 billion in download revenue and $4.1 billion in 2011.

Adams expects the rise in video downloads will have a more significant impact on TV viewing than on DVD sales.

“We don't expect sales and rentals of DVD to go into a steep decline,” he said.

The market researcher said downloading of content for TV will follow historical trends of new technology that overlapped to some degree with previous technology without disrupting the entire consumption model.

“Once they buy into the idea of downloads, that should get people more comfortable with watching movies from the Internet,” Adams said. “This is just the start of things.”

Add Comment