DVD SALES CONTINUES ON RECORD PACE

LAS VEGAS -- DVD had another record year capped by its introduction of a new format, said the Los Angeles-based DVD Entertainment Group during an event held here earlier this month at the Video Software Dealers Association Convention. The 20th annual show, featuring the Home Entertainment Expo & DVD Festival, ran Jan. 7 to 9 at the Sands Expo Center and Venetian Hotel."Once again, DVD has taken its

LAS VEGAS -- DVD had another record year capped by its introduction of a new format, said the Los Angeles-based DVD Entertainment Group during an event held here earlier this month at the Video Software Dealers Association Convention. The 20th annual show, featuring the Home Entertainment Expo & DVD Festival, ran Jan. 7 to 9 at the Sands Expo Center and Venetian Hotel.

"Once again, DVD has taken its place as the leader," said Group Chairman Emiel N. Petrone, citing the format's importance to home video's growth curve in an otherwise sluggish sales year.

Software titles shipped 182 million in 2000, compared to 97 million in 1999, and 26 million in 1998. And player penetration reached 14.5 million last year (from 4.8 million in 1999), being expected to rise to 27 million this year.

This rapid growth has far outstripped both VHS and CD, which had shipments of only one-seventh and one-third as much, respectively, during equivalent post-launch periods. These statistics from studies by the Group and by the Consumer Electronics Association of Arlington, Va., give evidence of the format's snowballing consumer acceptance.

"DVD grew at a rate of 2.3 times greater than in 1999," said Group board member Rusty Osterstock, general manager, Panasonic Consumer Electronics, Secaucus, N.J. "Each quarter, CEA was forced to take a hard look at the growing sales of DVD and increase their forecast," he said, reiterating the Group mantra: "DVD is -- and continues to be -- the fastest growing consumer electronics product ever."

The new DVD-Audio format added another growth factor late in the year, according to Dave Mount, chairman and chief executive officer of Warner/Electra/Atlantic, Burbank, Calif. Calling it "very difficult to launch ... in the middle of the Christmas season," he explained that "we hoped to have DVD-Audio out the previous year, but it took some time to get agreement on standards and to get the equipment necessary to do the authoring and the mastering of the product."

With over seven times the data capacity of a CD and over four times the sampling rate, the DVD-Audio disc "promises to be one of our industry's leading music carriers," said Osterstock. He also noted that there are over 30 DVD-Video/Audio combination player models on or announced for the market.

And with Advanced Resolution sound which at least doubles CD resolution, "this format actually puts you in the room with the music," said Mount.

Besides stereo and multi-channel surround sound, the new discs can also offer visuals like still screen graphics (credits, liner notes, lyrics, etc.) and music videos -- but only to DVD-Audio players (older DVD-Video players will access only CD functions). Some discs will have DVD-ROM capability as well, for linking to related sites on the Web.

Currently available are recordings by Natalie Merchant, Aaron Neville, The Doors and Stone Temple Pilots. Upcoming releases include Steely Dan, Dishwalla, Neil Young and Fleetwood Mac. The Group estimates that 165 titles will be available in the first half of this year, as day-and-date releases with CD are rolled out.