Consumers Spend a Record $16.8 Billion Buying and Renting Video; DVD Software Purchases Increased 2.4 Times to $4.6 Billion, Putting DVD Sales Ahead of VHS for the First Time.

Business Editors & Entertainment Editors

CES 2002

LAS VEGAS--(BUSINESS WIRE)--Jan. 9, 2002

Fastest-selling Electronics Product Now

in One in Four American Homes:

16.7 Million DVD Players Sold to Consumers in 2001

In 2001 consumers spent a record-breaking $16.8 billion buying and renting movies on video, up 21 percent over 2000, and more than twice what they spent on movie tickets ($8.1 billion).

Consumers spent $4.6 billion on DVDs, 2.4 times more than last year, an increase that put DVD purchases ahead of VHS purchases for the first time despite an installed player base of 25 million DVD households versus a VCR installed player base of 96 million households. Consumer spending on DVD purchases and rental combined were $6 billion, 2.4 times more than in 2000. The DVD Entertainment Group announced these figures and celebrated the format's success last night at the International Consumer Electronics Show (CES) in Las Vegas.

Strong DVD growth also placed home video revenues at nearly three times video game sales ($6.4 billion) and more than music CDs ($11.2 billion) and books ($16.5 billion). The aggregate sales of $16.8 billion for total video sales include $10.9 billion in new release revenues and $5.9 billion in library release revenue.

According to figures compiled by Ernst & Young on behalf of the DVD Entertainment Group, approximately 138 million DVD movies and music video titles shipped in the fourth quarter of 2001, 1.8 times more than the same quarter last year. And, more than 364 million units were shipped in 2001 alone bringing the total number of units shipped since launch to 675 million.

              DVD-VIDEO SOFTWARE SHIPMENTS (in millions)

                  1997     1998     1999      2000      2001
              -------- -------- -------- --------- ---------
YEARLY TOTAL       5.5     25.1     98.0     182.4     364.4
------------- -------- -------- -------- --------- ---------
TOTAL SHIPMENTS                                        675.4
(since launch -
North America)
------------- -------- -------- -------- --------- ---------
                           Figures compiled by Ernst & Young
                    on behalf of the DVD Entertainment Group

Fastest-selling Electronics Product

Now in One in Four American Homes

DVD is now in one of every four US homes and has reached this level of market penetration faster than any other consumer electronics product. As DVD completes its fifth year in the market, more than 31 million players have been sold to date.

According to figures compiled by the DVD Entertainment Group based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, 16.7 million DVD players were sold to consumers in 2001 representing 1.7 times more than last year. In addition, there are currently more than 54 million DVD playback devices including set top players, DVD-ROM drives and game machines.

                        DVD-VIDEO PLAYER SALES


                  1997       1998       1999        2000        2001
              -------- ---------- ---------- ----------- -----------

TOTAL          320,000  1,080,000  4,070,000   9,700,000  16,700,000
PER YEAR
------------- -------- ---------- ---------- ----------- -----------
TOTAL                                                     31,300,000
SINCE LAUNCH                                         (as of 12/31/01)
------------- -------- ---------- ---------- ----------- -----------
                                             DVD Entertainment Group

"With DVD now in a quarter of American households, DVD is America's hottest selling consumer electronics product," said Emiel N. Petrone, chairman, DVD Entertainment Group and executive vice president, Philips Entertainment Group, Worldwide. "DVD has become the driving force for increased sales of related home theater products such as televisions and sound systems."

DVD continues to grow at an accelerated rate far superior to any consumer electronics product in history, including the VHS and the CD; DVD has reached the 30 million unit sales milestone in a record five years.

                         HARDWARE COMPARISON:
               YEARS TO REACH 30 MILLION PLAYERS SHIPPED

              ----------------------- -------------------
              FORMAT                  YEARS
              ----------------------- -------------------
              VCR                     13 Years
              CD                      8 Years
              DVD                     5 Years
              ----------------------- -------------------
                                                CEA & DEG

To support these strong consumer sales, the industry shipped 16.6 million units in the US in 2001 bringing the total number of players shipped to approximately 32 million units. Continued strong consumer demand is expected to support shipments of over 20 million DVD players in 2002 in the US.

There are now more than 125 DVD player models marketed under 50 different consumer electronics brands. DVD players are available at most consumer electronics retailers and have become the focal point for retailers selling home theater systems. There are also a wide variety of DVD products available, including portables, DVD-Video/Audio combination units and car players.

The DVD Entertainment Group is a Los Angeles-based, industry-funded nonprofit corporation that exists expressly to promote consumer awareness of the benefits of DVD-Video and DVD-Audio, and to provide updated information to the media and the retail trade about DVD players and titles.

Regular members of the DVD Entertainment Group are 5.1 Entertainment Group, Artisan Entertainment, BMG Entertainment, Buena Vista Home Entertainment, Columbia TriStar Home Entertainment, DreamWorks Home Entertainment, EMI Recorded Music, Funai Corporation, Image Entertainment, JVC America, MGM Home Entertainment, New Line Home Entertainment, Panasonic Consumer Electronics Company, Paramount Home Entertainment, Philips Consumer Electronics Company, Pioneer Electronics (USA), ProScan, RCA, Sony Electronics, Sony Music Entertainment, Sony Wonder, Thomson Multimedia, Toshiba America Consumer Products, Twentieth Century Fox Home Entertainment, Universal Music Group, Universal Studios Home Video, USA Home Entertainment, Warner Home Video and Warner Music Group.

Associate members are AGI, Alpha Enterprises, Americ Disc, Blink Digital, Cinram, Crest National, Deluxe Digital Services, Digital Video Compression Corporation, Dolby Laboratories, DTS, Enterprise DVD, InterActual Technologies, Media Copy, Panasonic Disc Services Corporation, Planet Web, Ritek Corporation, Sonopress, Sony Disc Manufacturing, Sony Pictures DVD Center and Technicolor.

Interested consumers can reach the DVD Entertainment Group at 310/967-2953, via e-mail at [e-mail] or through its web site at www.dvdinformation.com.