DVD and VCR Players - UK - May 2005

SUMMARY

Between 2000 and 2005 the VCR and DVD markets have experienced contrasting fortunes, with dramatic growth in sales of the latter while the former has declined at a similar rate. The total DVD and VCR market grew by 117% in volume terms between 2000 and 2005 to reach 9 million units. At the same time value growth was less impressive, at just 6%.

The main reasons for this relatively poor rate of value growth include the fact that the VCR market has fallen so dramatically since 2000 and also because of the almost unprecedented level of price erosion that has occurred in both sectors and in the DVD market in particular. Sales of DVD players/systems accounted for around three-quarters of the market by volume and value in 2004, compared to just 51% by volume and 59% by value in 2002.

TABLE OF CONTENTS

Introduction and Abbreviations

Definitions

• Figure 1: DVD compatibility, 2005

Consumer research

Lifestage and Special Groups

ACORN

Advertising data

Abbreviations

Executive Summary

A tale of two formats

Key market drivers

VCRs struggling to compete

The DVD era now in full swing

DVD-HDD recorders set to be next big growth sector

Some polarisation of supply

Dwindling advertising budgets

Supermarket growth for entry-level products

Demographic factors

Plans to buy

Rapid technological change set to continue

Market Drivers

Competing electronics and entertainment

• Figure 2: Household penetration of TVs, VCRs and DVD players, 1998-2004
• Figure 3: Have you got a PC at home?, 1999-2004

If youve got it at home...

Disposable income and trading up

• Figure 4: PDI and consumer expenditure, at constant prices, 1999-2008

Affordable for the masses

• Figure 5: Amount spent on DVD players and VCRs, 2004

The age factor

• Figure 6: Trends and projections in UK population, by age group, 1999-2008

Shrinking household sizes

Format wars

Market Size and Trends

Living up to its potential

Learning the recorder

Intense price erosion hits values

• Figure 7: UK retail sales of DVD systems and VCRs, by volume and value, 2000-05

Consumer electronics prices decline sharply

• Figure 8: Average UK retail price per unit of DVD players/systems and VCRs, 2000-05

DVDs take the majority after 2002

• Figure 9: UK retail value sales of DVD players/systems and VCRs, 2002 and 2004
• Figure 10: UK retail volume sales of DVD players/systems and VCRs, 2002 and 2004
• Figure 11: UK retail volume sales of DVD players/systems and VCRs, 2000-05

Market Segmentation

DVD players - value sales increase slows

• Figure 12: UK retail value sales of DVD players/systems, 2000-05

New and portable technologies make up larger shares

• Figure 13: UK retail volume sales of DVD players/systems, by type, 2004

Recorders take a fifth

• Figure 14: UK retail value sales of DVD players/systems, by type, 2004

VCRs - not into obscurity just yet

• Figure 15: UK retail value sales of VCRs, 2000-05

A 2004 Christmas miracle

The final stretch

The Supply Structure

Overview of supply

Brand shares - DVD players

• Figure 16: Estimated DVD player/system manufacturer shares in the UK, by volume, 2002 and 2004

Brand shares - VCRs

• Figure 17: Estimated VCR manufacturer shares in the UK, by volume, 2002 and 2004

Company profiles

Alba plc

CyberHome

Hitachi

LG Electronics

Matsushita Electric Industrial Company

JVC

Panasonic

Philips

Pioneer

Samsung

Sanyo

Sharp

Sony Group

Sony

Aiwa

Thomson

Toshiba

Yamaha

Other suppliers

Advertising and Promotion

Above the line - after the initial push

• Figure 18: Main monitored media advertising expenditure on DVD players, 2000-04

Falling off the map

• Figure 19: Main monitored media advertising expenditure on VCRs, 2000-04

Fragmented spend reflects the market

• Figure 20: Main monitored media advertising expenditure on DVD systems, by top advertisers, 2002-04

Distribution

DVD players/recorders

• Figure 21: UK retail distribution of DVD players, by type of outlet, 2002 and 2004

Internet and catalogue showrooms steam ahead

Budget sales hit the supermarkets

VCRs

• Figure 22: UK retail distribution of VCRs, by type of outlet, 2002 and 2004

Catalogue showrooms show slower decline

The Consumer

Ownership - VCRs and DVD players

• Figure 23: Ownership of VCRs and DVD players, 2004

Averaging out

Children impact

Ownership - types of players

• Figure 24: Ownership of in-home entertainment products, 2002 and 2004

Households diversify their media

Purchase habits

Nearly half have purchased in the last two years

• Figure 25: When video recorder/DVD player was obtained, 2004

A levelling DVD playing field

Choosing to upgrade

• Figure 26: Intent to purchase in-home entertainment products, 2004

Focus on recording

Ownership and plans to purchase

Recording function more important with age

Spending time recording?

• Figure 27: How many hours a week do you use your video to replay TV programmes you have recorded?, January 2005

The Consumer - Detailed Demographics

Ownership of VCRs and DVD players

• Figure 28: Ownership of VCRs and DVD players, by gender, age, socio-economic group, presence of children, marital status and working status, 2004
• Figure 29: Ownership of VCRs and DVD players, by household size, region, lifestage and Mintels Special Groups, 2004

When obtained

Video recorders

• Figure 30: Video recorder - when obtained, by gender, age, socio-economic group, presence of children, marital status, working status, household size, region, lifestage and Mintels Special Groups, 2004

DVD players

• Figure 31: DVD player - when obtained, by gender, age, socio-economic group, presence of children, marital status, working status, household size, region, lifestage and Mintels Special Groups, 2004

Recording - ownership and plans to purchase

• Figure 32: Recording: Ownership and plans to purchase, by gender, age and region, January 2005
• Figure 33: Recording: Ownership and plans to purchase, by socio-economic group, working status and ACORN categories, January 2005
• Figure 34: Recording: Ownership and plans to purchase, by lifestage, presence of children, household size and Mintels Special Groups, January 2005
• Figure 35: Recording: Ownership and plans to purchase, by media usage, commercial TV viewing and supermarkets shopped, January 2005

The Future

PDI remains a key factor

Compatibility issues remain key

Blu-ray or HD-DVD?

The stay-at-home generation

VCRs to quietly slip away and rest in peace?

Forecast

Market to continue strong growth

• Figure 50: Forecast of the DVD and VCR market, by value, 2005-10
• Figure 51: Forecast of the DVD and VCR market, by volume, 2005-10
• Figure 52: Forecasted indexed growth of the DVD and VCR market, by volume and value, 2005-10

DVD systems

Low prices ensure mass market status

Compatibility issues could stall further growth

VCRs

Factors incorporated in the forecast