DVD overcomes natural format shift resistance

Citation

(2000), "DVD overcomes natural format shift resistance", Work Study, Vol. 49 No. 5. https://doi.org/10.1108/ws.2000.07949eaf.004

DVD overcomes natural format shift resistance

Keywords Technology, Video, Communications technology

New technologies in the consumer market often take off slowly. Consumers are naturally reluctant to buy into a new format - fearing both the loss of value in their current format, and worrying about the rate of change of the new format - and whether they will be left in the medium term with a "techno-turkey". DVD has been selling against that kind of natural resistance. Its one big saving grace is that there has not been a "format war" (as with VHS and Betamax) and so all supplier promotion has benefited the market generally. It also hit the market at about the point where people had started to buy rather than rent videos - so there was little resistance to the concept of buying films outright.

To demonstrate the undoubted success of DVD in the European marketplace, Warner Home Video and Sony Europe jointly announced European First Quarter 2000 hardware sales for the DVD-Video market. Sony Europe estimates that DVD hardware units shipped to dealers in the first quarter 2000 exceeded 425,000 units, a 310 per cent increase over first quarter 1999's 105,000 units. Figures for the comparable time period in the USA one year earlier were 411,000 units in first quarter 1999, a 287 per cent increase over first quarter 1998's 106,000 units.

According to Sony Europe, actual DVD shipments to the trade for the years 1998, 1999 and 2000 will aggregate 5,840,000 million players. During the first three years after their respective launches VCR sales totalled 855,000 and CD player sales were 1,120,000. Thus, the DVD in a comparable time frame is performing approximately seven times higher than the VCR and five times higher than CD, making it the fastest growing new packaged media format launch in history.

"DVD-Video has become the 'must-have' consumer electronic product in Europe", said Domingo Jaumandreu, Vice President Sony Home Network Company Europe. "Building on the success from last year in many countries, and with this year's high-visibility campaign from Sony and Warner, we expect to accelerate DVD-Video's penetration significantly in Europe."

"The hardware and software sales rates overwhelmingly substantiate the success of DVD as a global phenomenon", said Warren Lieberfarb, President of Warner Home Video and considered by many in the industry as the "Architect of DVD". "Consumers in Europe have embraced this new format for its high resolution digital video and superior audio as well as its high value content and convenience. We anticipate revenues from new releases and catalog to grow significantly over the coming year", he added.

Sony manufactures audio, video, communications and information technology products for the global consumer and professional markets. With its music, pictures, game and online businesses, Sony is uniquely positioned to become a leading broadband network company in the twenty-first century. In Europe, Sony recorded consolidated annual sales of close to EUR 14.42 billion for the fiscal year ended 31 March 2000. Sony Europe, headquartered at the Sony Center am Potsdamer Platz in Berlin, is responsible for the company's European electronics business and registered consolidated sales of close to EUR 8.50 billion for the fiscal year ended 31 March 2000. Sony Europe's home page can be found at http://www.sony-europe.com

With operations in 78 international territories - more than the video division of any other studio - Warner Home Video commands the largest distribution infrastructure in the global video marketplace. Warner Home Video's film library is the largest of any studio, offering top quality new and vintage titles from the repertoires of Warner Bros. Pictures, Turner Entertainment Company and HBO Home Video.