HD DVD & Blu-ray News

DVD’s Success May Expand To Others

The growth of video disc players could help rental, PC markets.

By Eydie Cubarrubia

Consumers may have returned unwanted Christmas gifts in droves on Monday, but one they probably kept was a new DVD player.

That’s because, according to a Nielsen Media Research report, DVD player penetration of U.S. households reached 81.2 percent in the third quarter of 2006-up 6.1 percent from the same period the year before-and was expected to keep growing. In contrast, VCRs shrank 4.5 percent to 79.2 percent during the same time frame.

That DVD players are increasing is good news for an industry where competing standards - HD-DVD and Blu-Ray, for high-definition video-have been expected to stall consumer adoption. Meanwhile, the trend is also helping the rental space as well as the slowing PC market.

“You have more people renting than ever,” Nielsen’s vice president of custom research, said Paul Lindstrom. “In the late 1990s, on average, people were renting around two [video] tapes per month…DVDs are a much more important part of the market. Now you’re up to almost three [DVD and VHS combined] rentals per month.”

It was unclear if the Nielsen report included DVD players embedded in PCs, though it did point out that 73.4 percent of U.S. homes have a computer. Regardless, consumer interest in multimedia-capable computers continues to grow-causing some makers, like Dell, to ally itself with one of the two competing standards.

“Dell continues to believe that the PC is the digital hub for entertainment,” said Marc Spier, senior manager of peripherals marketing for Dell, in discussing new PCs with Blu-Ray DVD players.

“There’s certain advantages PCs have over other [players] in the home,” Mr. Spier added-such as the ability to download, store, and play movies from the Internet.

And that’s why Dell isn’t just betting on hi-def DVDs. Mr. Spier said that besides including the hi-def DVD players in certain PCs, Dell is also making sure that its machines can support hi-def Internet downloads.

“They’re complimentary, not supplementary, technologies,” Mr. Spier said.

Meanwhile, Hewlett-Packard-which backs both HD-DVD and Blu-Ray standards - is expected to unveil digital-entertainment-centric products at CES, some of which may better support online movie sales.

“What we see here is the PC industry is redefining, the consumer electronics industry is redefining, and a new industry is emerging: the digital entertainment industry,” said Satjiv Chahil, HP’s vice president of global marketing for personal systems.

“Consumers are already preconditioned to have MP3 music, to have DVD movie experiences, are now preconditioned to have user-generated content after YouTube [became popular],” Mr. Chahil added, “and so our usage paradigm is very different from four, five years ago.”

But for customers who don’t yet care about high-definition video, DVD players, not the Web will probably remain the focus of home entertainment. After all, Nielsen reports that compared to the DVD player’s penetration, only 68.4 percent of U.S. homes have Internet access.