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DVD Overtaking VHS Overseas

30 Jul, 2002 By: Hive News

The European video software market is moving swiftly from tape to disc, much as the U.S. market, a new study from Screen Digest says.

Sales of VHS cassettes in Western Europe are expected to fall by 6 percent in volume this year, but record-breaking DVD sales and rentals are more than making up for the decline in VHS spending.

Screen Digest's new study, European Video: Market Assessment & Forecasts 2001-2006, Western European consumers will spend EUR5.2 billion on DVD software in 2002. The report also predicts that volume sales of DVD software in Western Europe will overtake VHS in 2003. However, it is expected to take longer for the digital format to claim supremacy at rental – DVD rental will not generate significantly more transactions than VHS until 2005.

"The availability of affordably priced DVD players across most European markets has been a major factor in consumers' rapid takeup of DVD," claims report author John Miller. "By 2003, almost 50 million Western European households will have acquired at least one standalone DVD video player. We expect this will increase to more than 100 million households by 2006, a penetration rate of 62 percent of the territory's television households".

With the growing number of other TV-based DVD platforms, such as video game consoles and DVD recorders, are included in the mix, Europe's total number of DVD-equipped homes becomes significantly larger. By the end of 2006, DVD consoles and recorders will have added almost 25 million new DVD-wired households to the 100 milion DVD standalones forecast for the same time.

By 2006, 77 percent of Western Europe's television households will own at least one TV-based machine capable of playing DVDs. The digital format will have achieved the same level of TV household penetration in eight years since its launch that took the VCR more than 20 years to achieve.

While consumers are readily switching to the new digital format, Screen Digest does not foresee the complete demise of the VHS business – as many suggest. VHS will still represent an important business in 2006, generating upwards of EUR3 billion in rental and retail spending.

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