2001: The Breakout of DVD

1
2001 The Breakout of DVD
Warren Lieberfarb President, Warner Home
Video DVD Entertainment Group Press
Reception International Consumer Electronics
Show January 8, 2002
2
Shipments of DVDs doubled in 2001.
Industry DVD Unit Shipments (in millions)
364
182
98
1999
2000
2001
Source DVD Entertainment Group
3
Consumer sales of DVDs more than doubled in 2001.
DVD Unit Sales to Consumers (in millions)
249
Library Titles
117
New Releases
100
32
41
132
12 20
59
1999
2000
2001
Source AC Nielsen/VideoScan/Retail Estimates
4
Consumer purchases of DVDs per household is
increasing.
Average Number of DVDs Purchased per Household
14.9
13.4
12.4
1999
2000
2001
Source AC Nielsen/VideoScan/Retail Estimates and
DVD Entertainment Group
5
Consumers spent 4.6 billion on DVDs in 2001,
2.4 times more than in 2000.
DVD Retail Consumer Expenditures (in billions)
4.6
1.8
156 CAGR
Library Titles
1.9
New Releases
0.7
2.8
0.7
.25 .45
1.2
1999
2000
2001
Source AC Nielsen/VideoScan/Retail Estimates
6
Consumers purchased 8.4 billion of DVD and VHS
combined in 2001, 1.5 times more than in 2000.
Video Retail Consumer Expenditures (in billions)
1.9
3.7
2000
5.6
4.6
3.8
8.4
2001
0.0 0.1 0.2 0.3
0.4 0.5 0.6 0.7
0.8 0.9
DVD Purchases
VHS Purchases
Source AC Nielsen/VideoScan/Retail Estimates
7
Last year, consumers spent a record-breaking
16.8 billion buying and renting movies on video.
Video Retail and Rental Consumer Expenditures
(in billions)
20.0
16.8
18.0
21
16.0
13.9
14.0
7.0
VHS 10.8
12.0
VHS Rentals
10.0
VHS Purchases
7.7
VHS 11.4
8.0
DVD Rentals
3.8
6.0
DVD Purchases
1.4
3.7
4.0
DVD 6.0
2.0
DVD 2.5
0.6
4.6
1.9
0.0
2000
2001
Source AC Nielsen/VideoScan/Retail
Estimates/VidTrac
8
Sell-through is driving total video growth.
Video Retail and Rental Consumer Expenditures
(in billions)
20.0
16.8
18.0
21
16.0
13.9
14.0
Rentals 8.4
7.0
12.0
VHS Rentals
Rentals 8.3
10.0
DVD Rentals
7.7
1.4
8.0
VHS Purchases
6.0
3.8
DVD Purchases
0.6
Purchases 8.4
4.0
Purchases 5.6
3.7
2.0
4.6
1.9
0.0
2000
2001
Source AC Nielsen/VideoScan/Retail
Estimates/VidTrac
9
Consumers spent 10.9 billion to see new movies
on video, 2.8 billion more than they did going
to movie theaters.
2001 Consumer Expenditures (in billions)
20.0
18.0
16.0
14.0
10.9
12.0
VHS Rental
8.1
10.0
VHS Purchases
5.1
8.0
DVD Rental
6.0
DVD Purchases
2.0
4.0
1.0
2.0
2.8
0.0
Video New Releases
Theatrical Box Office
Source AC Nielsen/VideoScan/Retail
Estimates/VidTrac, AC Nielsen EDI
10
Consumers spend more money on Video than other
entertainment options.
2001 Consumer Expenditures (in billions)
20
16.8
16.5
15
11.2
10
8.1
6.4
5
0
Video
Trade Books
Theatrical Films
Music CDs
Video Games
Source Video AC Nielsen/VideoScan/Retail
Estimates/VidTrac. Trade Books Kagan MediaCast.
Music CDs Soundscan. Theatrical Films AC
Nielsen EDI. Video Games Veronis Suhler.
11
DVD growth hit warp speed in 1999 when all
studios released new films on DVD simultaneous
with VHS.
Percentage of 4th Qtr. DVD Titles Released
Simultaneous with VHS
100
80
60
Not Day Date
88
100
40
86
Day Date
42
20
25
1997
1998
1999
2000
2001
Annual DVD Player Sales (Mil)
0.3
0.9
3.6
9.9
16.7
Source DVD Release Report
12
Consumers bought 16.7 million DVD players in 2001.
U.S. DVD Player Sales to Consumers (in millions)
20
16.7
15
9.9
10
3.6
5
0.9
0
1998
1999
2000
2001
Includes Home Theater in a Box systems,
Combination systems and Portable DVD players
Excludes DVD-ROM and Game Consoles Source DVD
Entertainment Group
13
1 in 4 homes now own a DVD player.
U.S. DVD Player Installed Base (in millions)
30
25.1
5.0
20
13.1
20.1
1.5
10
4.8
Multiple Player HHs
11.6
1.3
Single Player HHs
0
1998
1999
2000
2001
Includes Home Theater in a Box systems,
Combination systems and Portable DVD players
Excludes DVD-ROM and Game Consoles Source DVD
Entertainment Group
14
Including game consoles and PCs, there are over
54 million machines capable of playing DVD movies
at home.
DVD-Capable Machines (in millions)
54.3
60.0
50.0
7.5
40.0
DVD Game Consoles
15.5
26.1
30.0
DVD-ROM PCs
1.0
20.0
10.8
10.4
DVD Set-top Players
31.3
10.0
6.0
14.7
0
4.8
1999
2000
2001
Source DVD Entertainment Group, Adams Media
Research, NPD Funworld
15
DVD is the fastest-selling consumer electronics
product of all time.
Number of Years to Reach Cumulative Sales of 30
Million Units
5
DVD
CD Players
8
PCs
10
Cell Phones
12
VCRs
13
Color TVs
17
0
5
10
15
20
Years
Source eBrain Market Intelligence
16
2001 DVD player shipments exceeded last years
CES forecast by 28.
2001 DVD Player Shipments - Forecast vs.
Actual (in millions)
20
16.6
15
13.0
10
5
0
2001 CES FORECAST
2001 ACTUAL
Includes Home Theater in a Box systems,
Combination systems and Portable DVD players
Excludes DVD-ROM and Game Consoles Source DVD
Entertainment Group
17
Awareness and purchase intent for DVD are strong
and continue to improve.
Aided Awareness
100
Unaided Awareness
76
Definite Purchase Intent
23
Total Positive Purchase Intent
44
Consumer research supports purchases of over 20
million DVD players in 2002.
Source National Research Group, 12/16/01
18
Over 20 million DVD players are expected to be
shipped in 2002.
U.S. DVD Player Shipments - 2002 Forecast (in
millions)
25
20.8
20
16.6
15
9.7
10
4.1
5
1.1
0
1998
1999
2000
2001
2002 Projection
Includes Home Theater in a Box systems,
Combination systems and Portable DVD players
Excludes DVD-ROM and Game Consoles Source DVD
Entertainment Group