DEG Reports Hi-Def Growth; Slight Decrease in Software Spending

LAS VEGAS -- While spending on high-definition hardware is growing, sales and rentals of consumer home entertainment software declined slightly in 2006, owing to an eroding market for VHS products, according the year-end report from DEG: The Digital Entertainment Group, Los Angeles. The report was released during the Consumer Electronics Show here this week. Citing numbers from the Consumer Electronics Association, Arlington, Va., DEG noted that more than 31 million homes now have a high-definition television, with 12.5 million HDTVs sold in 2006, 5 million of them in the fourth quarter. Launched last year, over 750,000 set-top boxes and game consoles capable of playing new DVD formats like Blu-ray and HD DVD were sold. Meanwhile, total consumer spending on home video, including DVD and VHS, and rental and sell-through, dropped slightly from $24.3 billion in 2005 to $24.2 billion in 2006, DEG reported. Total consumer spending on DVD rental and sell-through rose from $22.8 billion in 2005 to $24.1 billion in 2006, with rental growing seeing a bigger percentage increase (about 15%, from $6.5 billion to $7.5 billion) than sell-through (about 2%, from $16.3 billion to $16.6 billion).