Home Video Hardware - US - November 2004

SUMMARY

Home Video Hardware - US - November 2004

Televisions and video playback systems are staples of the American home,vying with telephones, stoves, and refrigerators for 100% penetration in U.S.households. Watching television is the most popular leisure time activity in theU.S. The product is so central to the American household that current FederalCommissions Chairman (FCC) Michael Powell has stated, "There is perhapsnothing so dramatic to change for the family than its suite of televisionsets." Yet this is the very job of the home video industry, wherethree-quarters of sales are derived from the sale of television sets.

The market suffers from its enormous success. As an entire industry, homevideo is beyond mature. Virtually every home desirous of a television orplayback device owns one, and most own multiple televisions or playback devices.With an average of 2.5 televisions per household, the television surpassesstoves and refrigerators in its ubiquity.

Industry growth is accomplished through upgrades propelled by constantadvances in technology and stylization that create new product groups.Presently, the industry has set forth the most desirable product in the historyof the industry high-resolution, small-footprint, widescreen flat-paneltelevisions. Unfortunately, these products are substantially pricier than mostconsumers are accustomed to paying for television sets. As a result, industrysales during the review period were largely dependent on whether consumers weresufficiently hopeful about the future to place thousands of dollars of homevideo product on credit.

Looking ahead, as prices drop, desirable new product should result inmultiple sequential years of industry growth. Because this expected growth is soreadily apparent, however, the industry is saturated with new entrants inaddition to a large number of market leaders in a fragmented market. Virtuallyall players are mining the same product categories-flat-panel TVs, andcombination DVD-R/DVRs and DVD-recorders/VCRs. Unless manufacturers developdistinct approaches to the market, the future for many will be bright, digital,and flat, but sufficiently competitive to drive profit margins down.

Mintel defines the home video market as consisting of new electronic hardwarecapable of receiving and/or playing video content.

Products covered in this report include:

• Television monitors
• Video playback systems

The report excludes sales of the following:

• Used products
• Video gaming hardware
• High-end niche markets including front-projection television and digitalVHS
• Cable boxes and satellite receivers
• System accessories, including batteries, wires, headphones, and rabbitears
• DVDs, cassette tapes, and other video software content products, whetherprerecorded or blank
• Mobile video systems
• PCs and PC accessories, whether or not related to video playback
• Professional playback systems, defined as products used primarily incommercial venues or solely by content creation companies
• Video and still cameras.

TABLE OF CONTENTS

INTRODUCTION AND ABBREVIATIONS

• Introduction
• Other relevant reports
• Definition
• Abbreviations & Terms
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• Market advances amidst wild annual swings
• New technology abounds
• Re-distribution of wealth positive for advanced TV
• Television continues to pick up leisure hours
• Television, DTV, continue to pick up segment dollars, but DVD is the mostcommon purchase
• Sony leads fiercely competitive and homogenous environment
• Advertising battle over HDTV
• The Consumer
• Trending the future

MARKET DRIVERS

• New technology
• Household income
• Figure 1: Home video products penetration, by household income, May2003-April 2004
• Figure 2: Real GDP growth (%), Consumer Confidence Index, and home videohardware sales growth, 1999-2004
• Graph 1: Consumer Confidence Index and home video hardware sales growth,1999-2004
• Distribution of GDP
• Figure 3: Number of households per income group, 2000 and 2003
• Graph 2: 2003 Percentage of households per income group and change from2000
• Demographic trends
• Figure 4: American generations, 2000-2010
• Figure 5: Median household income, by age of householder, 2003
• Graph 3: Median household income, by age of householder, 2003
• Generation Factors
• Echo Boom/Gen Y (Ages 10-27)
• Gen X (Ages 28-39)
• Baby Boom (Ages 40-58)
• Swing (Ages 59-71)
• WWII (72+)
• Ethnic populations
• Figure 6: Incidence of owning at least one early lifecycle product, byrace/ethnicity, May 2004
• Figure 7: American households, by race/ethnicity, 2000-2010
• Competition and aid from other markets
• Figure 8: Consumer annual hours spent with media, 1999, 2001 & 2003
• The role of the movie theater in encouraging upgrades and providingcontent support

MARKET SIZE & TRENDS

• Figure 9: Total U.S. manufacturer sales of home video products, at currentand constant prices, 1999-2004
• Graph 4: Total U.S. manufacturer sales of home video products, at currentand constant prices, 1999-2004
• Figure 10: Total U.S. manufacturer sales of home video hardware, byvolume, 1999-2004
• The Impact of HTB sales
• Figure 11: Hypothetical industry gains were dvd players not included inhtb, at current and constant prices, 1999-2004

MARKET SEGMENTATION

• Introduction
• Figure 12: Sales of home video hardware, segmented by product type, 2002& 2004
• Graph 5: Sales of home video hardware, segmented by product type, 2004
• Television unit sales
• Figure 13: Unit sales of televisions, segmented by product type, 2002& 2004
• Figure 14: Total U.S. manufacturer sales of televisions, at current andconstant prices, 1999-2004
• Figure 15: Total U.S. manufacturer sales of televisions, by volume,1999-2004
• Video playback
• Figure 16: Unit sales of home video playback devices, segmented by producttype, 2002 & 2004
• Figure 17: Total U.S. manufacturer sales of video playback products, atcurrent and constant prices, 1999-2004
• Figure 18: Total U.S. manufacturer sales of video playback product, byvolume, 1999-2004

SUPPLY STRUCTURE

• COMPANIES AND BRANDS
  • Attitudes toward brand name products
  • Sub-branding high-end lines
  • Manufacturing partnerships
  • Brand share
  • Figure 19: Brand selection of recent home video equipment, July 2004
• COMPANY PROFILES
  • Sony Corporation of America (Sony)
  • Market position
  • Qualia
  • Sony Products
  • Matsushita Electric Corporation (Panasonic, JVC)
  • Market position
  • Selected Panasonic products
  • Toshiba
  • Market position
  • Select product information
  • Thomson Consumer Electronics (RCA)
  • Market position
  • Select product information
  • Mitsubishi
  • Market position
  • Selected product information
  • Hitachi
  • Market position
  • Select product information
  • Philips
  • Market position
  • Select product information
  • Other leading brands

ADVERTISING & PROMOTION

• Overview
• Sony
• Panasonic
• Toshiba
• RCA
• JVC
• Mitsubishi
• Samsung
• Hitachi
• Philips

THE CONSUMER

• Introduction
• Home video penetration trends
• Figure 20: Home video products penetration, 2002, 2003, and 2004
• Current Ownership
• Figure 21: Home video products in household, May 2003-April 2004
• Figure 22: Home video products penetration, by household income, May2003-April 2004
• Figure 23: Home video products penetration, by household size, May2003-April 2004
• Figure 24: Home video products penetration, by household size and incomeof <$25K, May 2003-April 2004
• Figure 25: Home video products penetration, by presence of children under18 in household, May 2003-April 2004
• Figure 26: Home video products penetration, by gender and household type,May 2003-April 2004
• Figure 27: Home video products in household, by age, May 2003-April 2004
• Figure 28: Home video products ownership, by race/ethnicity, May2003-April 2004
• Figure 29: Home video products penetration, by video hardware ownership,May 2003-April 2004
• Figure 30: Home video hardware penetration, by videoownership/subscription, May 2003-April 2004
• Figure 31: Ownership of home video hardware, by videocassete tapes orblank DVDs bought or rented, May 2003-April 2004
• Multiple product ownership per household
• Figure 32: Ownership of home video hardware, May 2003-April 2004
• Figure 33: Ownership of home video, by household income, May 2003-April2004
• Figure 34: Ownership of home video, by household size, May 2003-April 2004
• Figure 35: Ownership of home video, by children, May 2003-April 2004
• Figure 36: Ownership of home video, by income and household size, May2003-April 2004
• Figure 37: Ownership of home video, by gender and household size, May2003-April 2004
• Figure 38: Ownership of home video, by race/ethnicity, May 2003-April 2004
• Figure 39: Ownership of home video, May 2003-April 2004
• Figure 40: Ownership of home video, by use of video games, satellite, orcable TV, May 2003-April 2004
• Figure 41: Ownership of home video, by use of home video software, May2003-April 2004
• Figure 42: Ownership of multiple home video video products, by price ofmost recent home video purchase, May 2003-April 2004
• Purchase of high-end product in most recent purchase
• Figure 43: amount spent on most recent home video hardware purchases, May2003-April 2004
• Figure 44: amount spent on most recent home video hardware purchases, byhousehold income, May 2003-April 2004
• Figure 45: amount spent on most recent home video hardware purchases, bypresence of children under 18 in household, May 2003-April 2004
• Figure 46: amount spent on most recent home video hardware purchases, byhousehold size, May 2003-April 2004
• Figure 47: amount spent on most recent home video hardware purchases, bygender and household size, May 2003-April 2004
• Figure 48: amount spent on most recent home video hardware purchases, byhousehold age, May 2003-April 2004
• Figure 49: amount spent on most recent home video hardware purchases, byrace/ethnicity, May 2003-April 2004
• Figure 50: amount spent on most recent home video hardware purchases, byuse of television with video games, or cable or satellite content delivery,May 2003-April 2004
• Figure 51: amount spent on most recent home video hardware purchases, byvideocassete tapes or blank DVDs bought or rented, May 2003-April 2004
• Market participation in the last 12 months
• Figure 52: Home video products purchased in the last 12 months, July 2004
• Figure 53: Home video products purchased in the last 12 months, by age,July 2004
• Figure 54: Home video products purchased in the last 12 months, bychildren in household, July 2004
• Summary

FUTURE & FORECAST

• FUTURE TRENDS
  • The Future is flat
  • Growth in front projection and micro-display rear projection
  • Plasma and LCD entering into direct competition
  • Cable TV to push DVR
  • DVD-Recorders to replace DVD players
  • HD-DVD to market in 2005
  • Playback and audio products blur into media center products
  • Demographic shifts
  • Figure 55: U.S. households, by age of head of household, 2005-2010
• MARKET FORECAST
  • Home video products
  • Figure 56: Forecast of total U.S. manufacturer sales of home videoproducts, at current and constant prices, 2004-2009
  • Graph 6: Forecast of total U.S. manufacturer sales of home videoproducts, at current and constant prices, 2004-2009
  • Televisions
  • Figure 57: Forecast of U.S. manufacturer sales of televisions, atcurrent and constant prices, 2004-2009
  • Video playback products
  • Figure 58: Forecast of U.S. manufacturer sales of video playbackproducts, at current and constant prices, 2004-2009
  • Forecast Factors

APPENDIX: TRADE ASSOCIATIONS AND PUBLICATIONS

APPENDIX: RESEARCH METHODOLOGY

• Consumer Research
• Sampling & Weighting
• Presentation & Definition
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts

APPENDIX: WHAT IS MINTEL?

• Mintel Reports
• Global New Products Database
• ComperemediaR
• Mintel Services
• POS+
• Mintel Consultancy