DVD Spun to New Heights in 2003; Discs Drove Video Industry to Numerous Records.

Entertainment Editors/Business Editors

ENCINO, Calif.--(BUSINESS WIRE)--Jan. 5, 2004

Noting the numerous DVD sales and rental records set in 2003, the Video Software Dealers Association (VSDA) today declared that 2003 was "the year of DVD" in the home video market.

"We have simply run out of superlatives to describe the DVD phenomenon," said VSDA President Bo Andersen. "It's bigger and better than anyone imagined it could be."

Consumers spent record amounts purchasing and renting DVDs in 2003. Adams Media Research estimates that consumer purchases of DVDs totaled more than $12 billion in 2003, up $3.9 billion, or 46%, from 2002. Consumers spent an additional $4.3 billion renting DVDs in 2003 (through December 21, 2003), up 53% from the same period last year, according to Home Video Essentials (a product of Rentrak Corporation). The number of DVDs rented also set a record in 2003. Home Video Essentials reports that, through December 21, 2003, approximately 1.3 billion DVDs were rented during the year -- up 55% from the same period in 2002.

Other notable milestones for DVD in 2003 include:

-- The DVD buy rate in 2003 was approximately 17 discs per

player. This is nearly three times the peak average number of

VHS titles purchased per year, six in 1996.

-- The retail price of DVDs is now at its lowest ever. The

average price of a DVD at the end of 2003 was $20.21, down

from a high of $25.53 in 1999. And the average cost of a DVD

rental in 2003 was just $3.20.

-- More that one-half of all U.S. households had a DVD player by

the end of last year.

-- It is estimated that there are now more than 30,000 titles

available on DVD. Another 160 titles are released on DVD every

week.

-- Disney/Pixar's "Finding Nemo" became the top-selling DVD of

all time in November, when it sold 15 million units during its

first 12 days of availability.

-- TV shows on DVD showed tremendous growth. Approximately 6% of

DVD titles released in 2003 were television series, up from

3.9% in 2002. It is estimated that sales of TV DVD totaled

$1.46 billion in 2003.

(Sources available on request.)

Looking ahead, Andersen anticipates continued strong growth in the DVD sales and rental markets. "Home video is America's favorite way to watch the latest movies, and DVD is America's favorite home video format," Andersen stated. "The superior video and audio quality, the bonus scenes, and the special features of DVD have captivated the American public. Given that we have just passed the fifty percent mark in DVD player household penetration, I would say this love affair is just starting."

Established in 1981, the Video Software Dealers Association (VSDA) is the not-for-profit international trade association for the $20 billion home entertainment industry. VSDA represents more than 1,500 companies throughout the United States, Canada, and a dozen other countries. Its members operate more than 12,500 retail outlets in the U.S. that sell and/or rent DVDs, VHS cassettes, and console video games. Membership comprises the full spectrum of video retailers (from single-store operators to large chains), video distributors, the home video divisions of major and independent motion picture studios, and other related businesses that constitute and support the home video entertainment industry.