SCOTTSDALE, Ariz. -- New formats for delivering digital content will fuel more DVD growth and not cannibalize existing DVD sales, according to a study released by the research company In-Stat here.
Worldwide, the value of all published DVD products is expected to grow from $33 billion during 2004 to as much as $76.5 billion by 2009, according to the research firm. The expected compound annual growth rate for the industry during that period is 18.2%.
Formats like HD DVD and Blu-Ray are anticipated to jump-start growth as consumers start replacing their existing content libraries of the older VHS tapes and DVDs, the researchers found.
"High-definition HD DVD discs will likely re-energize the disc rental business because people with a new high-definition television set and a new HD DVD player will be likely to rent movies during the first year or so," said Gerry Kaufhold, analyst, In Stat, who wrote the study.
HD DVD versions will be released for "high end" and "blockbuster" movie titles later this year, Kaufhold said. Blu-Ray products will take off in Asia in 2006, followed by Europe and other places.
The report also predicted that new "on demand" point-of-sale systems, made possible by DVD recorders, have the potential to fuel further growth in the market.
Kiosks for burning DVD content at the point of sale that are hooked into secure networks at retail locations could make it possible for alternate channels like convenience markets, coffee sellers, book stores, airport shops and other stores to sell DVDs without maintaining large inventories of product, according to the report.
"The 'content on demand' machinery would be used to provide less popular titles. So the retailer would sell more content, but would not have to keep it all in stock. So it's probably a win-win-win for the retailer," Kaufhold said.
Since many retailers already use digital signs and secure networks, a "content on demand" network could have a relatively low installation cost, he said. Most retailers would like to have stockkeeping units of popular titles on hand, even if the new kiosks were installed.