Although the number of DVD players is expected to double this year (see 'Number of DVD Players Doubling in 2001'), the total number of American households with DVD players at the end of this year will still only be about 25% of those with VCRs. Nevertheless current trends, analyzed by Adams Media Research and reported in the latest issue of Video Business, indicate that consumers will spend some $6.2 billion dollars on DVD software this year, which is roughly half of the $12.5 billion consumers will spend on all sell-through video. Last year DVD sales rose to $3.4 billion out of a total of $10.8 billion spent on sell-through products. Compare the $6.2 billion consumers will spend this year on buying DVDs with the total domestic box office for films in 2000, which was $7.7 billion, and you begin to see the selling power of this new medium.
The reason that 25% of the households will represent 50% of the sales boils down to enthusiastic library-building by those who have purchased DVD players. The trends are similar to what happened when the Compact Disk replaced the long-playing phonograph record -- demonstrating once again that a new format with noticeably better quality (and fewer storage problems) has enormous potential to revitalize what was a maturing industry. The superiority of DVD is especially evident in the field of anime, where the 'subbed versus dubbed' controversy is completely eliminated by the capacity of the DVD to include both versions and allow the viewer to decide whether to watch a subtitled version or a dubbed version.
Interestingly enough, although DVD's percentage of rental revenues has climbed steadily from 4% in 1999 to 14% in 2000 and an estimated 23% in 2001, it is in line with the DVD player's market penetration. The real anomaly is in sell-through video, where the library-building of the DVD fans is most evident. The 50% market share that DVD is grabbing is absolute proof that DVD is indeed the 'collector's medium' of choice.