DEG says industry stable despite slight DVD dip

By Marcy Magiera -- Video Business, 1/7/2008

JAN. 7 | U.S. consumer spending on DVD sales and rentals fell 2.9% in 2007 , the Digital Entertainment Group (DEG) said today at the International Consumer Electronics Show in Las Vegas. That reflects rentals being flat at $7.5 billion, and sell-through declining 3.6% to $16 billion.

Overall, consumer spending on all formats including DVD, VHS and high-def discs, was $23.7 billion, down 2%, even though unit shipments were up 2%, to 1.7 billion, DEG said. DEG said consumers spent nearly $300 million on high-def discs in the advanced technologies’ first full year at market.

Overall, the trade group sought to position the market as healthy, despite the slight declines.

“The home entertainment market proved remarkably stable in 2007 despite challenging economic factors including the housing slump, credit crunch and rising gas and food costs,” the group said in a press release. “This tremendous sustainability underscores that the buying and renting of packaged media remains a core spending choice for U.S. consumers who have grown accustomed to the enhanced experience and convenience the medium provides.”

On the hardware side, DEG, said an estimated 33 million standard DVD players were bought by U.S. consumers in 2007, down only about 1% from the previous year. High-definition media devices, including set-top boxes and game consoles in the HD DVD and Blu-ray Disc formats, collectively have sold through nearly 4.5 units since launch in 2006, according to the DEG.

Video Business will release an in-depth look at the industry in 2007, including top titles and studio market shares, on Jan. 21.