Home Video - VHS will be history and HD-DVD will hit $18.3B

In the wake declines in rental revenue and the HD-DVD format war, the home video industry sales will drop 0.4% in 2006 to $24.1 billion, according to Kagan Research's new study THE STATE OF HOME VIDEO. The  video rental revenues are expected to be off 8.3% to $7.2 billion while sell-through revenue is estimated to grow 3.4%, with DVD revenue hitting $16.8 billion.
Home Video Market 2006 2009 2012 2015
HD-DVD $0.08B $2.64B $14.98B $18.33B
Standard DVD $16.75B $16.78 $12.92B $8.34B
VHS $0.09B - - -
Source:Kagan Research's THE STATE OF HOME VIDEO (October 2006)
In 2006, $16.8 billion of the $16.9 billion DVD revenue will come from standard-definition DVD. However by 2009, VHS will be virtually extinct and high-definition DVD revenue should grow to more than $2.6 billion with either one winning format or a combination HD DVD/Blu-ray player being introduced to the market. By 2015, VHS will be history and high-definition DVD will be the major-market shareholder with $18.3 billion in revenue.

Other key findings and projections from THE STATE OF HOME VIDEO include:

  • Total rental revenue is estimated to be $4.2 billion in 2015, posting a negative 5.8% CAGR for the decade.
  • Online revenue has been steadily increasing its share of the market, grabbing 17.2% in 2005, or nearly $2.8 billion. 
  • Online revenue has posted a 182% CAGR since 1997, a larger growth rate than the bricks-and mortar growth of 115%.
  • In 2005 , 491 DVD titles tracked by Kagan made $9.2 billion in wholesale revenue for the studios. The average wholesale price of a DVD grew 3.9% to $16.70 from $16.08 in 2004.

For more information on THE STATE OF HOME VIDEO (11TH EDITION) go to www.kagan.com/SHV-11

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