DVD SALES SOAR 57% ABOVE 2002.

Byline: Greg Hernandez Staff Writer

The DVD express continues to gather steam.

During the first six months of 2003, a phenomenal 427.2 million DVD units were shipped to retailers, representing a 57 percent leap compared with the same period a year ago, according to figures released Tuesday by the DVD Entertainment Group, an industry trade association.

``This is a freight train that can't be stopped,'' said DVD Entertainment Group President Bob Chapek. ``We are enjoying the momentum and looking to the future for continued growth with an eye toward what is next.''

Fueling the growth in software sales is the 10.3 million DVD players that have already been sold so far this year, easily outpacing the first half of 2002 when 7.3 million players were sold. There are now DVD players in close to 50 percent of all U.S. homes with more than 66 million players sold in the past six years.

These robust hardware sales are connected to the soaring sales of DVD software, including such recent box office hits as ``Lord of the Rings: The Two Towers'' and ``Die Another Day,'' as well as the growing popularity of television programs - both current and classic - being sold in boxed sets.

Overall, the number of DVD units shipped in North America has reached nearly 1.8 billion since the format was launched in mid-1997, according to figures compiled by Ernst & Young for the trade association.

The DVD Entertainment Group, the six-year-old trade association charged with promoting the DVD format, also announced Tuesday that it would be changing its name to the Digital Entertainment Group as it expands its mission to adjust to emerging technologies.

``The fact that the Digital Entertainment Group is comprised of both hardware and entertainment software companies gives us a unique forum for the discussion of such future potential technologies,'' said Chapek, who is president of Disney's Buena Vista Home Entertainment division.

The association not only includes the home entertainment divisions of the major studios that supply much of the industry's content, but also hardware suppliers such as Panasonic Consumer Electronics, Toshiba America Consumer Products and JVC Company of America.

``As we continue to embrace the success of the DVD format, consumer enthusiasm for DVD hardware and software continues to be one of the primary drivers for the overall success of home theater,'' said Panasonic Electronic's Gary Bauhard, DVD Entertainment Group vice president. ``DVD, as the center of home theater experience, has directly contributed to the growth of other consumer electronics categories.''

Chapek said the industry is now looking ahead to high-definition products with five different versions floating around. Known as HD-DVD, the improved product features high-resolution video and audio that is a clear quality improvement over standard DVD.

While he doesn't expect the industry to reach consensus on any single format, Chapek hopes the expanded role of the association - the only association with hardware and software people at the same table - will lead to some level of cooperation.

``Wouldn't it be great if five proponents would get together with major studios and say, 'Let's build a system around what the consumer wants,''' Chapek said. ``History is filled with new formats that come in with multiple formats. It confuses the consumer and is normally a consumer disaster.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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DVD-VIDEO SOFTWARE SHIPMENTS

SOURCE: Ernst & Young

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