Table of Contents
Introduction and Abbreviations
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- Introduction
- Other relevant reports
- Definition
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- A maturing market
- DVD sell-through carries majority of the market
- Increases in hardware penetration drove sales
- Demographic and economic factors positive for market
- Tightly controlled supply stream
- Suppliers foot advertising bills
- Wal-Mart, Target, Best Buy, Blockbuster head distribution
- Internet subscription rental service growing rapidly
- Three-quarters of consumers participate in the market
- Theater attendance important to sales
- VoD and DVR to hurt rentals
- HD-DVD to provide limited support in 2006
- Theatrical release windows continue to shrink
- Increased piracy looming
- Continued growth of DVD sales and rentals
Market Drivers
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- Hardware penetration
- DVD and VCR households
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- Figure 1: U.S. household penetration of DVD and VCR players, 2000-04
- Multiple-unit DVD and VCR households
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- Figure 2: Ownership of multiple VCR & DVD players, 2000-04
- TV format penetration
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- Figure 3: Penetration of various TV models per household, in the U.S., 2002 and 2004
- Home theater audio system households
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- Figure 4: Penetration of home theater audio systems, 2001-04
- Portable DVD hardware
- Content
- Competition with other media for consumer time
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- Figure 5: Hours spent on various media, average consumer, annual projections, by media type, 2003-07
- The battle for convenience—DVD vs. DVR and VoD
- Release dates
- Population characteristics
- Youth participation
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- Figure 6: U.S. population, by age, 2000-10.
- The impact of changes in racial/ethnic populations
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- Figure 7: U.S. population, by age and race/Hispanic origin, 2005
- Distribution of income in the U.S.
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- Figure 8: Number of households per income group, 2000 and 2003
- Figure 9: Graph: Households per income group in 2003 and change from 2000
- Piracy
Market Size and Trends
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- Overview
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- Figure 10: Total U.S. retail sales and rental of video software, at current and constant prices, 1999-2005**
- Figure 11: Graph: Total U.S. retail sales of video software, at current prices, 1999-2005
- Shipments and sales per unit
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- Figure 12: Total shipments to U.S. retailers of video software and average sales per unit, 2000-05
- The impact of lower rental prices
Market Segmentation
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- Introduction
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- Figure 13: Sales of home video software, segmented by rental and sell-through, by format, 2003 and 2005
- Figure 14: Graph: Sales of home video software, segmented by rental and sell-through, by format, 2005
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- Figure 15: Graph: Trends in sales of home video software, segmented by rental and sell-through, by format, at current prices, 1999-2005
- Rental sales
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- Figure 16: Sales of home video software rentals, at current and constant prices, 1999-2005
- Figure 17: Graph: Sales of home video software rentals, at current prices, 1999-2005
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- Figure 18: VHS rental revenue, at current and constant prices, 1999-2005**
- Figure 19: Graph: VHS rental revenue, at current prices, 1999-2005
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- Figure 20: DVD rental revenue, at current and constant prices, 1999-2005**
- Sell-through sales
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- Figure 22: Sales of video software sell-through, at current and constant prices, 1999-2005**
- Figure 23: Sales of video software sell-through, at current prices, 1999-2005
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- Figure 24: VHS sell-through revenue, at current and constant prices, 1999-2005**
- Figure 25: Graph: VHS sell-through revenue, at current prices, 1999-2005
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- Figure 26: DVD sell-through revenue, at current and constant prices, 1999-2005**
- Figure 27: Graph: DVD sell-through revenue, at current prices, 1999-2005
Supply Structure
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- Figure 28: Supplier sales of video software in the U.S., 2003 and 2005
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Advertising and Promotion
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- Advertising
- Retailers
- Studios
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- Figure 29: Video software advertising in the U.S., 2004
- Promotions and partnerships
- Retailers
- Studios
- DreamWorks’ Shrek II received promotional aid in the form of $2 coupons for Croissanwiches from Burger King in packages of DVD and VHS copies of the movie; Burger King was the promotional partner for the theatrical release as well. The fast food chain featured Shrek II on its menus, door banners, and drive-thru signs.
Retail Distribution
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- Overview
- Preferred retail locations for purchase/rental
- Source of purchases by adults
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- Figure 30: Preferred retail locations for DVD purchases by adults, 2002 and 2004
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- Figure 31: Preferred retail locations for DVD purchases, by age, January-September 2004
- Source of purchases by teens
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- Figure 32: Preferred retail locations for DVD purchases by teens, 2002 and 2004
- Choice of rental location by adults
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- Figure 33: Preferred retail locations for DVD rentals by adults, 2002 and 2004
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- Figure 34: Preferred retail locations for DVD rentals by age, January-September 2004
- Online rental subscribers and buyers
- Choice of rental location by teens
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- Figure 35: Preferred retail locations for DVD rentals by teens, 2002 and 2004
- Video Specialists
- Blockbuster, Inc.
- Blockbuster demographics
- Movie Gallery/Hollywood Entertainment
- Movie Gallery/Hollywood Entertainment demographics
- Independents
- Mass merchandisers and warehouse clubs
- Wal-Mart
- Wal-Mart demographics
- Target
- Target demographics
- Kmart
- Costco
- Sam’s Club
- Online retailers
- Netflix
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- Figure 36: Subscriptions and revenue for netflix, 2000-04
- Amazon.com
- Electronics stores
- Best Buy, Inc.
- Best Buy demographics
- Circuit City Stores, Inc.
- Music and book specialists
- Musicland (Sam Goody, Media Play)
- Trans World Entertainment
- Hastings Entertainment, Inc.
- Borders Books and Music
- MTS (Tower Records)
- Supermarkets
- Mail order
The Consumer
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- Introduction
- Market participation
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- Figure 37: Incidence of VHS or DVD rental or purchase in the previous 12 months, topline and by age, January-September 2004
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- Figure 38: Incidence of VHS or DVD rental or purchase in the previous 12 months, by household income, January-September 2004
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- Figure 39: Incidence of VHS or DVD rental or purchase in the previous 12 months, by presence of children and marital status, January-September 2004
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- Figure 40: Incidence of VHS or DVD rental or purchase in the previous 12 months, by race/ethnicity, January-September 2004
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- Figure 41: Incidence of VHS or DVD rental or purchase in the previous 12 months, by cohorts, January-September 2004
- Activity correlations
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- Figure 42: Activities correlated to home video software purchases and rentals, January-September 2004
- The relationship between cinema attendance and home video participation
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- Figure 43: Incidence of VHS or DVD rental or purchase in the previous 12 months, and cinema attendance in the previous six months, January-September 2004
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- Figure 44: Cross-analysis of incidence of VHS or DVD rental or purchase in the previous 12 months, January-September 2004
- Teen participation in video software market
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- Figure 45: Incidence of teen VHS or DVD rental or purchase in the previous 12 months, by age and gender, January-September 2004
- Child participation in video software market
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- Figure 46: Incidence of children’s VHS or DVD rental or purchase/gift in the previous 12 months, by age and gender, January-September 2004
- Frequency of DVD purchases or rentals
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- Figure 47: Number of DVDs purchased/rented, by selected demographics, January-September 2004
- Frequency of consumption by cohort
- Frequency of consumption among teens
- How rental activity compares to purchasing activity for DVDs
- Preferred content
- Adults
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- Figure 48: Types of home video product rented or purchased by adults, January-September 2004
- Teens
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- Figure 49: Types of home video product rented or purchased by teens, January-September 2004
- Selection of content by or for children
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- Figure 50: Whether child picks out movies rented, by gender and age, January-September 2004
- Subscription to an Internet service
- Heavy vs. light users of home video software
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- Figure 51: Heavy and light users of home video product, topline and by age, June 2005
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- Figure 52: Heavy and light users of home video product, by household income, June 2005
- Attitudes towards home video compared to competing forms of entertainment
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- Figure 53: Attitudes towards home video software in relation to competing forms of entertainment, topline and by age, June 2005
- Other significant demographic results
- Attitudes of heavy users compared to light users
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- Figure 54: Attitudes towards home video software in relation to competing forms of entertainment, by heavy/light buyers, June 2005
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- Figure 55: Attitudes towards home video software in relation to competing forms of entertainment, by heavy/light renters, June 2005
- Attitudes towards video content
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- Figure 56: Attitudes towards home video content, topline and by age, June 2005
- Other significant demographic results
- Attitudes towards purchasing DVDs
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- Figure 57: Attitudes towards purchasing home video product, topline and by age, June 2005
- Other significant demographic results
- Attitudes towards downloading films
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- Figure 58: Attitudes towards purchasing home video product, by heavy vs. light buyers, June 2005
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- Figure 59: Attitudes towards purchasing home video product, by heavy vs. light renters, June 2005
- Attitudes towards the quality of feature film content
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- Figure 60: Attitudes towards quality of content, by level of software consumption, by heavy vs. light buyers, June 2005
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- Figure 61: Attitudes toward quality of content, by level of software consumption, by heavy vs. light renters, June 2005
- Summary
Future and Forecast
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- Future trends
- Piracy
- Combating piracy
- HD-DVD
- Impact of DVR
- Impact of VoD
- Legal downloads (IPVoD)
- DVD hardware penetration growth to slow
- Prices to decline under onslaught of piracy and digital delivery
- Uptake of broadband to fuel Internet sales
- Tinkering with release windows
- Demographic change
- MARKET FORECAST
- DVD rental
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- Figure 62: Forecast of U.S. DVD rental revenue, at current and constant prices, 2005-2010
- DVD sell-through
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- Figure 63: Forecast of U.S. DVD sell-through revenue, at current and constant prices, 2005-2010
- Forecast Factors
Appendix: Trade Resources
Appendix: Cohort Definitions
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