DVD Recorders Making Slow, But Sure, Headway21 Jan, 2005 By: Jessica Wolf
The industry may think DVD recorders will be the final nail in the VCR's coffin, but the nail is driving home rather slowly.
U.S. sales of DVD recorders hit 1.2 million units in 2004, according to the Consumer Electronics Association (CEA), doubling that of 2003.
That's right around forecasts, said Sean Wargo, director of industry analysis for CEA, maybe a little higher.
But growth in the recordable category is still slow, thanks mostly to the large $100 to $150 price differential between the cheapest DVD playback device and a DVD recorder, he said.
Once recorder prices dip below the $200 mark, making that price difference closer to $100, that is when sales should really pick up, Wargo said.
CEA is forecasting DVD recorder sales will more than double again this year to reach 2.6 million units though that's probably an “aggressive” estimate, Wargo said.
“We think there's going to be a lot more products out there, a lot more options, a lot better price points for the consumer,” he said. “Realistically, we'll probably see sales of about 2 million to 2.3 million units.”
A forecast by Research and Markets Ltd., a global research firm based in Dublin, estimates DVD recorders will grow to 48 percent of the worldwide DVD market by 2008, limited by their premium over play-only devices.
Though most of the DVD recorders sold in the United States in 2004 were the type that record only to physical media, “consumers seem to be gravitating a bit toward the recorders with hard drives,” Wargo said. Last year's 206,000 DVD recorders sold had hard disk drives for storing and playback of recorded programming.
These systems are still a bit pricier, though last year saw hard-drive enabled machines in the same price range as other DVD recorders, which likely helped account for an uptick in sales, Wargo said.
Recordable products that double-dip like DVD recorder/VHS combos and recorders that come with programming guides like TiVo, — or are actually enabled with the digital recording service — are gaining increased interest from consumers who want to convert their VHS tapes to DVD and time shift their TV-program viewing, Wargo said.
Of course, piracy remains a concern, especially for the hot TV on DVD market — though the much-vaunted broadcast flag should help deter some piracy as the recordable market grows. Some shows will be encrypted for no recording, some will be available for recording one time only and some will only be allowed to be recorded onto a hard drive, not to a physical disc.
DVD playback is the most important feature for potential recordable buyers, according to an InStat Research survey. Transferring home video from VHS to DVD is the second most important.
Eventually, that pesky home-movie transfer issue should abate. Consumers are snapping up camcorders that record directly to DVD. According to Techno Systems research, DVD camcorders are one of the fastest-growing segments of the entire recordable market.
The DVD-R, DVD-RW, DVD-RAM options are still a source of confusion to the recordable DVD consumer, but two groups, the Recordable DVD Council (RDVDC) and the RW Product Promotion Initiative are in the process of testing compatibility between hardware that features all three formats, the latest results of which will be released in March.
“Consumers shouldn't have to worry about which formats they buy when they buy a DVD recorder,” said Tony Jasionowski, director of RDVDC North America. “These tests ensure they won't have to give it a thought.”
Another factor in the growth of the market is digital TV. The FCC has mandated that all DVD recorders shipped after July 1, 2007 be enabled with a digital TV tuner or no tuner at all. These digital-TV units are more costly, but consumers who already have digital set-top boxes from their cable or satellite provider could purchase the no-tuner recorders and still be able to record digital TV programming by connecting to their set-top outputs.