DIGITAL STRATEGIESDo Consumers Want Digital?

Itâs probably well known to most readers that JVC and Panasonic are offering D-VHS technology to both the broadcast industry and to consumers as a VHS replacement or an alternative to DVD as a delivery medium. A few of the major movie studios have claimed they will release titles in the format. Whether this represents a significant inroad in the marketplace or a diversion is yet unkown, but recent figures, touched upon briefly here last month, indicate that DVD is a juggernaut and that the old standby, regular VHS, still clings to its market share.

Despite the acceleration of DVD sales in the latter half of 2001, VCR sales came out on top for the year, totaling 14,910,476 units compared to DVD's 12,706,584 units. The DVD total represents a 49.5 percent increase over 2000 DVD unit sales.

"We expect to see VCRs sustain their 95 percent household penetration rate for some time to come," Consumer Electronics Association Senior Industry Analyst Sean Wargo claimed, "largely because of the expansive VHS archives many people have amassed. Also, the average price of a VCR is around $50 and a DVD unit is approximately $193, which makes having both a VCR and a DVD a viable option for many consumer electronics enthusiasts."

Still, from September to the end of the year, DVD sales surpassed VHS. Does that represent the beginning of the end for the old format? How does D-VHS fit in the picture? Itâs too early to tell, but stay tuned.

"2001 did not mark the end of analog," Wargo added, "but it certainly marked the primetime arrival of DVD. CEA anticipates DVD will continue to amaze the industry in the coming year and recordable DVD players will experience a good year, as well, in 2002. In fact, CEA projects 14.9 million DVD units will be sold this year.ä In addition to impressive DVD sales figures, the video product category enjoyed digital television (DTV) product sales success in 2001. Final DTV product figures from CEA show that 1.46 million units were sold last year, which represents more than $2.6 billion.