DVD Players: A Mainstream Transition
By Ross Rubin, NPD Techworld director of industry analysis


Even though it lacked its tape-based predecessor’s capability to record for many years, the DVD player has become one of the most popular consumer electronics devices for the average consumer. With components routinely selling at electronic specialty stores and mass merchants for less than $40, DVD players can cost less than a single DVD box set. The high video quality and physical tenacity of the CD’s successor has redrawn Hollywood’s revenue streams and even popularized the phrase “straight to video.”

While the basic technology of the DVD has remained the same during its penetration into the mainstream, its packaging has seen some changes. Taking a cue from the CD, many vendors introduced DVD players that could accommodate multiple DVDs. However, it’s rare that consumers queue up five movies in a row. On the other hand, consumers have been loath to abandon their VCR libraries, so DVD/VCR combos have become quite popular even though copy protection does not allow these units to record copyrighted DVDs onto tape. These combo units accounted for about 54% of revenue in July 2004.

DVD has also been influenced by the slow arrival of digital television. Two years ago, only about 16% of DVD players included a progressive scan feature that takes better advantage of high-definition TVs. Now, however, the tables have turned, and all but about 17% of DVDs sold in July 2004 include the feature. While today’s DVD players still can’t take full advantage of high definition (HD) television, movies make a great showcase for massive plasma displays, and the dearth of available HD content may be further driving DVD player sales.

Looking forward, many new technologies look to capitalize on the success of the DVD. DVD recorders still represent a small percentage of DVD units but were responsible for about 15% of home DVD deck revenue in July 2004. As many portable DVD players have dropped below $200, they have created a small but growing market for movies on the go, or at least in the car. Finally, high-definition DVD players using new formats such as HD-DVD and Blu-ray promise to all but eliminate the gap between the cinematic experience of movie watching and viewing movies at home. While it will be years before this technology filters into the mainstream, average consumers will soon have good reason to hold on to their popcorn.