Record European Spending
by VGLN Staff

Wednesday, July 31, 2002

Screen Digest Study Predicts Total Western European Consumer Spending On Video Software Will Reach Record EUR11.1bn by End 2002 - Rising to EUR18.4bn in 2006

LONDON - July 30, 2002 - As VHS Sales Continue to Decrease, Western European Consumers Spending On DVD Software is Forecast to Increase by More Than 150% Between 2002 and 2006, to EUR15.3bn - 85% of Total Spending On Video Software

The European Video Software Market is moving swiftly from tape to disc. Sales of VHS tapes in Western Europe are expected to fall by six per cent in volume in 2002. However, record-breaking DVD sales and rentals are more than making up for the decline in VHS spending.

According to a new study by Screen Digest `European Video: Market Assessment & Forecasts 2001-2006', Western European consumers will spend EUR5.2bn on DVD software in 2002. The report also predicts that volume sales of DVD software in Western Europe will overtake VHS in 2003. However, it is expected to take longer for the digital format to claim supremacy of rental - DVD rental will not generate significantly more transactions than VHS until 2005.

"The availability of affordably priced DVD Video players across most European markets has been a major factor in consumers' rapid take-up of DVD", claims the author of the report John Miller. "By 2003, almost 50m Western European households will have acquired at least one standalone DVD Video player. We expect this will increase to more than 100m households by 2006, a penetration rate of 62% of the territory's television households".

With the growing number of other TV-based DVD platforms, such as video games consoles (Playstation2 and Xbox) and DVD recorders are included in the mix, Europe's total number of DVD equipped homes becomes significantly larger. By the end of 2006, DVD consoles and recorders will have added almost 25m new DVD equipped households to the 100m DVD standalones forecast for the same time. By 2006, 77% of Western Europe's television households will own at least one TV-based machine capable of playing DVDs. The digital format will have achieved the same level of tv household penetration - in eight years since its launch - that took the VCR more than 20 years to achieve.

While consumers are readily switching to the new digital format, Screen Digest does not foresee the complete demise of the VHS business - as many suggest. VHS will still represent an important business in 2006, generating upwards of EUR3bn in rental and retail spending.

For more information on European Video: Market assessment & forecast 2001-2006, which assesses 22 territories go to www.screendigest.com.

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