Optical Disc Shipments

Monday December 29, 2008

Here’s a little forecast snapshot as we look ahead to new video disc formats and how they will stack up against the highly successful DVD format. Growth of pre-recorded DVDs will continue to slow and take a sharp turn south by 2013. Only Blu-ray and other pre-recorded disc formats will log growth in the forecast period. In January, DTC will publish the third edition of its The Video Optical Disc, Devices and Media:Worldwide Shipmentsreport which is a data-intensive report that provides detailed worldwide forecasts of the Video Optical Disc devices and media market. DVD and Blu-ray devices, DVD PCs, video optical disc videogame systems, and pre-recorded discs are forecasted through 2013. For more information please contact us atinfo@dtcreports.com

Source: DTC

The New Camcorder Business

Monday December 22, 2008 – Stewart Wolpin

A consumer goes into a store to buy a camcorder. On one shelf are AVCHD or HDV camcorders from Sony, Canon, JVC, Panasonic and Samsung, which list for around $1,000.

On another nearby shelf are HD camcorders that are $250 or less, are about the size of a deck of cards, and look (and are) really simple to operate.

The consumer knows that the Sony, Canon, JVC, Panasonic and Samsung camcorders are better. But four times better?

I'm willing to bet two things. First, these cheap HD camcorders will sell as well if not better than traditional HD camcorders in Q4 in the U.S., and, second, they will come to dominate the worldwide camcorder business in the coming years.

Traditional camcorder manufacturers derisively refer to these cheap camcorders as "toys." But this dismissive attitude sounds achingly familiar to the way the Big 3 automakers dismissed the then-new tiny gas-efficient foreign imports back in the day. We all know how that hubristic attitude worked out.

These "toy" HD camcorders are a relatively new phenomena and their availability is mostly confined to the U.S. market at the moment. It's only been in the last month or so that Creative Labs announced its Vado ($229.99) and Flip its MinoHD ($229.99), and Kodak started selling its Zi6 ($179.95), all of which join the previously introduced DXG 567V ($179). All capture either 720p or 1080i video using H.264 compression to flash memory, either built-in, to a removable SD card, or both, run on a couple of AAs, have a tiny LCD view screen, a flip-out USB jack for simple PC/Mac connections and cheap plastic lenses.

These four models are likely to be joined by others from other manufactures, some well-known some unknown, and likely none from Sony, et al. As time goes on, flash-based "toys" will not only outsell higher-end HD camcorders, but $250-plus standard definition models from Sony, et al, as well. In a couple of years or so, standard definition camcorders will disappear and the all-HD camcorder market is likely to split similarly to the digital camera world. These HD "toys" will become the predominant point-and-shoot market while HD models from Sony, et al, become the analogous D-SLR high-end.

Like the digital camera world, consumers know that HD camcorders from Sony, et al, capture far higher quality video. But for a quarter of the price and point-and-shoot operational simplicity, the video these new "toy" camcorders capture will more than just suffice, and will become the camcorder business.

Will the House Brand Finally Win?

Monday December 15, 2008 – Shelby Cunningham

If the big-box discount retailers are the ones to sell the most consumer-electronics products in this recession-burdened holiday season, will the growing attractiveness of private-label store brands put big dents in market-share usually held by traditional consumer electronics brands?

The tanking economy coupled with big-box stores devoting more shelf space to private-label brands could upset the TV market-share apple cart. More shelf space inherently increases consumer visibility, and leveraged with cheaper prices and bigger screens for the buck, this may be the recipe that allows house brands to eat into that coveted market share generally occupied by household names.

Traditionally companies like Sony and LG win out with huge sales compared to store brands and lesser known brands like Trutech and Insignia. But discount retailers can drive greater profit margins with house brands especially in this times when consumers are ripe for bargain shopping. With some stores giving the off brands prime shelf space previously reserved for name brand products, perennial popular brands like Sony and LG may lose some market share.

A coworker admitted being tempted to buy a house brand TV while out Christmas shopping at a big box store just because it was so inexpensive. She resisted the urge because there wasn’t a need for a new TV in her home, but retailers are fostering similar interest from lots of consumers, and DTC expects that everyone won’t exercise the same discipline.

EchoStar Turns to Latin America for New Growth

Monday December 8, 2008 - Antonette Goroch

EchoStar’s recent announcement that it is forming a joint venture with MVS Comunicaciones, one of the largest media/telecom companies in Mexico, reflects both a maturing of the U.S. market for digital TV and the prospect of renewed growth in the Latin America market. The move, which involves the use of EchoStar’s 77° W orbital slot to offer a digital TV package into Mexico, DISH Mexico, is telling on several levels.

DISH Network (EchoStar’s DTH programming arm) has seen subscriber growth slow dramatically in the last year, driven by both saturation in the U.S. market overall and heated competition from both digital cable and IPTV. While EchoStar has been able to maintain revenues, through growth in ARPU for both subscription services and equipment from HD, its set-top box (STB) shipments and subscribers declined in 2008.

To combat these cyclical turns, DISH Network has sought to diversify its revenue base, seeking to increase STB sales through other channels, through new technology (all AVC STB, Sling Media acquisition), and new markets--even reaching out to U.S. cable operators, their one staunch rivals—to supply next generation STBs.

The MVS deal is driven by this same impulse to expand markets, and, interestingly, makes use of an orbital slot which EchoStar had originally petitioned the FCC to use for U.S. local-into-local and HD broadcasts. The alliance will give EchoStar a firm foothold in an area where the incumbent DTH provider, Sky Mexico (controlled by DirecTV after a merger with the News Corp entity four years ago), has operated with little competition from cable providers and has seen a recent uptick in subscription growth during the last year. MVS, which currently serves some 570,000 analog cable subscribers (which will be targeted for marketing the new service), will be a strong partner to EchoStar and will likely give DirecTV a run for its money.

For EchoStar, the benefits are clear. It will certainly gain a new foothold for its STB shipments and subscriber revenues in a far less competitive market. This will no doubt buffer the heavier competition and market saturation in the U.S. market, and help reinvigorate its bottom line.

Will Video Games Save Us in These Hard Times?

Monday December 1, 2008 - Shelby Cunningham

Video games consoles and games could be one of the few holiday shopping bright spots in this slowing economy. The category performed very well in the fourth quarter of 2007 when the U.S. recession began and DTC estimates that 49 million video game consoles will ship in 2008. Spending a minimal amount on a video game console for the home can be seen as a money saver in comparison to frequent family entertainment outings in these tough economic times. And with the frequently falling prices on the Xbox 360 over the past year, as well as the already low price of the Nintendo Wii, this is a viable option for many families.

Add in the fact that the Xbox 360 and Sony’s PlayStation 3 (PS3) play video optical discs (the PS3 even plays Blu-ray), and allow for movie streaming over the Internet, and you have an entire home entertainment center in a box.

The only console of the bunch that lacks video playback along is the Nintendo Wii. Yet with the already low price, unique product design and generations of Mario fans, Nintendo can afford to focus solely on gaming.

If and when I am ever in the market for a Blu-ray player I have already decided that a PS3 is the way to go. Multiple functionality is becoming increasingly more popular in the consumer electronics world. As is the case with the iPhone; sales are up and many owners say their phone is replacing their personal media player (PMP) as well as home internet service in some cases.

As long as Microsoft and Sony keep prices low and expand upon their console offerings outside of the video game realm they should be able to stay in the game and weather the economic storm. Giving people more options with their PS3 and Xbox consoles makes for more reasons to continue purchasing them. As for the Wii, if it isn’t broke, don’t fix it; Nintendo can focus on retaining its current business model and identify ways to expand upon the platform for their next generation console and should remain on top of the video game console world.