DVDS HITTING 1 BILLION UNITS FORMAT RECORDS MASSIVE GROWTH.

Byline: Greg Hernandez Staff Writer

The DVD industry is poised to sell its billionth unit just five years after the launch of the home-video format, roughly half the time it took the VHS to reach the same sales milestone, the DVD Entertainment Group announced Wednesday.

``What a landmark number in only five years,'' said Bob Chapek, president of the industry-funded nonprofit corporation. ``The number is impressive in itself but it also backs up the fact that DVD is the fastest-adopted consumer technology ever.''

Since the inception of the DVD format in 1997, software shipments have reached more than 947 million units, with the industry expecting to have its biggest fourth quarter ever. DVD releases slated for later this year include such blockbusters as ``Spider-Man,'' ``Star Wars: Episode II - Attack of the Clones,'' ``Lord of the Rings: The Fellowship of the Ring'' and ``Monsters, Inc.''

During the first half of 2002, more than 270 million DVDs were shipped to retailers, a whopping 80 percent increase over last year, according to figures compiled by Ernst & Young on behalf of the DVD group.

There are more than 16,000 titles available in the DVD format. While feature films is the dominant genre, recent growth is also being fueled by an increase in sales of family-oriented programs, concerts, music videos and television programming.

``People are buying DVDs at rates never seen in the video world and as a result, DVD is having a banner year again,'' said Chapek, also president of Disney's Buena Vista Home Entertainment division.

Chapek said the sales pace of both DVD software and hardware have exceeded the predictions of ``even the most aggressive prognosticators.''

The group reported the shipment of 8.1 million DVD players during the first six months of the year, a 53 percent jump from 2001's figures. This brings the total number of DVD players shipped to date to 40 million.

In all, more than 20 million DVD players are expected to be shipped to retailers this year. There are now more than 250 different models being marketed under 60 consumer electronics brands.

The group predicts that nearly 50 percent of U.S. homes will have players installed by year's end when you include PCs with DVD-ROM drives and game consoles with DVD capability.

DVD now represents almost half of the $23 billion video business in the United States. It is predicted that by 2006, DVD will account for 80 percent of what will then be a $30 billion business nationwide.

Some of the format's popularity is being driven by the bonus features that come with most new releases. A study released this week by the Video Software Dealers Association showed that deleted scenes are by far the most popular extra feature, topping such other common DVD features as behind-the-scenes documentaries and interviews with cast members. Storyboards and film trailers were ranked as the least-favorite bonus features.

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DVD SALES MILESTONE

Source: DVD Entertainment Group

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