FEBRUARY 10, 2003 • TIBURON, CA—The DVD market is huge,
and getting larger; very rapidly. No longer limited to home entertainment
playback boxes, it is being combined with increasing numbers of consumer
electronics products; computers, portable devices, appliances and
industrial systems—DVD is everywhere.
This report discusses all of these form factors plus the new integrated
combo systems with DVDs in them, and offers four-year forecasts and
market trends for home entertainment systems, computers, portable
DVD, vehicle DVD, and DVD recorders. We include a discussion of DVD
semiconductor components, their suppliers, and the software decoders
and editing systems.
The study is a supply-side report primarily focused on drive shipments
and subsequently on products with DVD drives in them. There is also
a discussion on the semiconductors used in DVD systems, the media,
the end user software, and the technology including some discussion
on copy protection.
The report covers the companies, and some of the suppliers’ products.
There is also a look into the future both in market forecasts and
technology.
Executive Summary
This 2003—2006 DVD market study found the total market for all
types of DVD systems (players, recorders, set-tops, PCs, etc) will
be over 420 million units in 2006—a CAGR of 31.4% combined, and
271% for recorders.
In the report we cover the market size and forecast for five platforms
plus semiconductors, software, new technology, the eDVD, licensing,
and copy protection.
The media production for DVDs will exceed 1.6 billion discs in 2006,
a CAGR of 159%.
Semiconductors are one of the major benefactor of this phenomenal
growth, enjoying a 44% CAGR of 44% by 2006.
Software decoders, editors, and encoders also benefit from the explosion
of the DVD market.
Since the introduction of the DVD in 1996 and as an entertainment
device, DVD is enjoying very fast growth, as evidenced by meteoric
U.S. sales since mass-market introduction only six years ago.
DVD players first started shipping in Japan in 1996 and the count
for shipments of consumer DVD starts in 1997 as supply rises and titles
start coming out. The first title published on DVD was A Hard DayÕs
Night. Since then, DVD has enjoyed the most rapid rise of any consumer
electronics technology ever introduced.
The technology has caught the imagination and interest of consumers.
DVD set-top box players have boomed in sales due to the price-elasticity
of this segment driven by the reduction in the average selling price
The average selling price fell from $504 in July 1998 to $129 in major
retail outlets as of December 2002 with some units going for as low
as $39.
DVD STB players have been a CE segment enhancer producing a ripple
effect in the home theater category as consumers upgraded their TVs
and their sound systems, as well as digital TVs and DVR/PVRs (Digital/Personal
Video Recorders).
This report provides a discussion on the Technology and basic Definitions,
as well as market sizing information.
Recordable Formats
There are five recordable formats for the DVD disc: DVD Audio, DVD+R,
DVD-R, DVD-RAM, and DVD-ROM, where DVD-ROM is mass produced for movies,
games, and computer programs, and DVD+R, -R, and RAM may be produced
by consumers. DVD audio is mass produced for music.
Two organizations exist, the DVD+RW Alliance (+R), and the DVD Forum
(-R, and RAM). Multi-function drives are being offered that will write
in most if not all of the formats, hopefully putting an end to the
confusion.
We have entered the era of Digital Darwinism where any combination
of features and functions can be built. This is yielding systems that
have DVD and VHS, DVD with web searching capability, DVD and TV, DVD
and PVR and satellite, etc. These are marketing experiments and many
if not most of them will, as with any experimental species, die
Copy protection and Digital Rights Management exists in the form
of the Content Scrambling System (CSS), and regional coding. Hollywood
wants more aggressive copy-protection, especially when the DVD player
can output the information in digital form. This is a highly controversial
issue right now
We define the market as having five platforms that employ DVD drives:
Stand alone CE devices (set top boxes) which includes Stand-alone
Consumer Electronics Players (CE-Ps), and Stand-alone Consumer Electronics
Recorders (CE‑Rs).
Integrated CE (TV, DVR, A/V systems and others) which includes game
consoles and Integrated Consumer Electronic Players (ICE-Ps), and
Integrated Consumer Electronic Recorder (ICE‑Rs)
Computer, which is comprised of desktop PCs, mobile computers, and
workstations and includes Computer-based Stand-alone External Players
(C‑Ps) and Computer-based Stand-alone External Recorders (C-Rs)
Automotive, which includes entertainment and other systems.
Personal mobile, which includes players and camcorders.
Summary of market size
The combined numbers for players and recorders is shown in the following
diagram
Figure
1. Total DVD Player/Recorder market size
The data indicates a very robust and good growth rate for the DVD
drive market, its associated semiconductors, and the platforms and
boxes they are installed in.