Warner Home Video has halved its initial projections of $1.5 to $1.9 billion down to $750 million for consumer spending on next generation DVD formats this fourth quarter. This comes after consumers spending just $30 million on high definition equipment and software up until September, which turned out to be around half Warner's forecast of what consumers would spend during that time. According to Steve Nickerson, Warner's Vice President of Market Management, consumer spending has fallen mainly as a result of the Blu-ray and HD DVD player launch delays.
The studio
originally expected Pioneer, Panasonic, Sony and Philips to all have
Blu-ray disc players out on the market by now, however these launch periods have
been delayed to between October and December. Worse still, the limited number of
PlayStation 3 consoles will almost certainly affect upcoming high definition equipment sales even further.
Despite the new lower projections, Nickerson went on to mention that in four years, the market penetration of high definition DVD players will be around 100 million or almost triple that of the 35 million set-top DVD players sold within four years of the DVD launch. Even though only 300,000 set-top DVD players were sold in the first year of the DVD launch, Nickerson predicts that there will be around 1.7 million high definition DVD players sold with in the first year of the HD DVD launch.
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The studio said consumers spent just $30 million on high-def hardware and software through September, about half what Warner forecast would be spent in the period. In presenting the studio's revised research at the High Def 101 conference here Friday, Warner senior VP of market management Steve Nickerson said spending slimmed because most manufacturers delayed high-def player launches. |
When DVD players first came out, consumers were able to experience the benefit from their existing television set, however as high definition players require a HDTV set to make use of the player's HD capabilities, Warner really seems to be over estimating how quickly the next generation formats will penetrate the market, particularly within its four year prediction.
Source: Video Business online
