Audio Video News

Rental figures for DVD will equal those of VHS by the end of the year, according to recent predictions made at the recent Video Software Dealers Association (VSDA).

The undisputed video king for two decades, VHS is now entering its twilight years. Statistics compiled by Video Store magazine's research director Judith McCourt, presented at the VSDA's annual convention in Las Vegas, demonstrate that DVD rentals have grown from 25% of the video business in January of this year to 40% by the end of June. McCourt predicted that DVD rentals could reach 50% by the end of the third quarter of 2002. Shipments of DVDs have grown 80% during the first six months of this year, compared to the same period in 2001, according to marketing research firm Ernst & Young.

More than 272 million discs have been shipped so far this year, as well as 8.1 million DVD players, the DVD Entertainment Group reported to attendees at the VSDA convention. As many as 40 million players have been shipped since the format's inception in 1997, with 20 million predicted for this year alone.

DVD "has truly re-invigorated our industry on both the hardware and software ends of the business and is changing the way Hollywood makes movies and the way people watch them at home," Buena Vista Home Entertainment president Bob Chapek told conventioneers. DVD is the most successful format in history, Chapek noted, surpassing even color television and cellular telephones in its rate of acceptance.

Somewhat paradoxically, the format could prove too successful for the good of video dealers, many of whom are concerned that DVD sales may eat into their rental revenue. Consumers have shown a greater willingness to purchase DVDs than VHS tapes, particularly as retail prices for the discs approach $10 per unit, a price point that Warner Home Video president Warren Lieberfarb calls "the impulse purchase level." During the reign of VHS, movie fans typically purchased about 4.5 videocassettes annually; compared to the 16 DVDs they buy now, according to Tom Adams of Adams Media Research. "I don't think you'll see that kind of multiple on the rental side," Adams stated.

Adams' research indicates that by 2006, DVD players should be in about 70 million American households. As further proof of DVD's emerging dominance, the DVD Entertainment Group predicts that the one-billionth DVD will be shipped this month. It took ten years for VHS to reach the same level.