DEG Europe: Holiday DVD purchases to rise over 2006

By Ned Randolph -- Video Business, 12/18/2007

DEC. 18 | Despite signs of maturation in the DVD market, an industry advocacy group reported today that its own customer surveys reveal more DVD purchases will take place over the holidays this year than in 2006.

The organization, Digital Entertainment Group Europe, issued a rosy view that not only shows DVDs remain the present of choice of consumers—with 78% of U.K. consumers questioned purchasing one or more DVDs over the holidays, compared to 68% in 2006—but that a majority of consumers plan to upgrade to HDTVs and players in the next year.

DEGE is a pan industry group of studios formed in 2002 to promote DVD and the high-definition formats to consumers and trade groups across Europe.

Tuesday's report said that "it is evident that there is still a huge demand for DVDs."

It comes a week after the NPD Group said its research showed home entertainment spending down between mid-November and mid-December. Fewer people had bought a home movie in the period than in 2006 and 2005.

“My guess is that it’s really the moderate and light DVD consumers that are falling off on buying,” said Russ Crupnick, VP and senior entertainment analyst at NPD. “The average DVD household now has about 80 DVDs. For some people, it has got to be really exciting content for them to buy, as they already have these large collections.”

NPD’s findings explain what has been seen as soft fourth-quarter sales of DVDs, despite several $300 million-box-office titles bowing before the holidays.

Many analysts blame softness in the market on the ongoing high-def format war, which has turned off consumers who might otherwise look to replace existing DVD libraries with the new discs.

DEGE's survey revealed that 92% of DVDs purchased by consumers this Christmas will be in standard-definition. However, DEGE said it expects consumer appetite for home entertainment to increase as buyers adopt new technologies next year.

The survey revealed that high-definition will be embraced more aggressively, with 54% of those questioned planning upgrade, 39% of which within the next six months.

Yves Caillaud, senior VP of Warner Home Video, Europe, Middle East & Africa, said, "It is extremely encouraging to see that the DVD format continues to hold its own this Christmas as a gift of choice. Furthermore, it is exciting to see consumers gaining confidence and understanding of the possibilities in the next generation of home entertainment. The survey suggests that 2008 is set to be an interesting year for high-definition."