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DVD Denting VHS Replication

21 Mar, 2002 By: Thomas K. Arnold

DVD-Video replication will break the billion unit mark this year and will double in 2003 to nearly 2 billion units, International Recording Media Association (IRMA) president Charles Van Horn predicted today, citing an association study.

Replicators produced 849 million DVD-Video units in 2001, Van Horn noted in his address at the trade association's 32nd annual Recording Media Forum.

"In short, from the beginning of last year to the end of next year, the number of DVD-Video units produced will have more than doubled," he said. "That's opportunity."

Van Horn also projected a sharp uptick in DVD-ROM replication, from 63 million units in 2001 to 140 million units in 2002 and 214 million units in 2003. As of last year, he noted, there were more than 100 million DVD-ROM drives on the market.

Going against the grain with a prediction that DVD-Audio would be a further growth area, Van Horn cited IRMA report findings of worldwide DVD-Audio production of 16 million units last year, and projected that figure will grow to 50 million units in 2002 and 101 million units in 2003.

The Recording Industry Association of America (RIAA) recently reported sales of DVD-Audio in the United States last year came in at just 300,000 units, well below estimates.

VHS production has held steady, Van Horn said, despite consistent talk of the format's imminent demise.

"For a ‘departing industry category' VHS tape continues to give us a surprise or two in the North American market," he said.

Blank tape production in 2001 declined by just 2 percent, from 372 million cassettes in 2000 to 365 million cassettes last year, while prerecorded VHS tape duplication fell by 5 percent, from 976 million units in 2000 to 922 million cassettes last year.

"The impact of DVD-Video…on worldwide VHS duplication is forecast to be meaningful in 2002 and beyond," he said, warning, "We see a 10 percent decline in total VHS units duplicated this year worldwide, followed by another 10 percent in 2003."

One major supplier, 20th Century Fox Home Entertainment, doubled its VHS catalog business last year, moving 3 million tapes in 14 months.

Van Horn attributed the boost in large part to a successful direct-response marketing pitch for three vintage Shirley Temple films.

"Fox repackaged three of the child star's movies that sold them as a VHS boxed set for $29.95, using direct-response TV commercials during less expensive ‘remnant time'," Van Horn noted.

"The Shirley Temple ‘experiment' was so successful it gave retailers like Kmart and Wal-Mart compelling reasons to stock the set, which boosted sales even further.

"Now, a DVD edition is planned, broadening the market for a classic, and still popular, movie even further," he said.

DVD editions of the three films—Dimples, Heidi and Bright Eyes—were released Jan. 29, a Fox spokesman said. No shipment figures were available.

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