|LONDON (Reuters) - DVD will become the standard home video format and will replace video cassettes within the next five years, according to a report issued on Thursday.
Sales of DVD (Digital Video Disc) hardware will reach 46 million units this year, including 21 million in the United States and 17 million in Europe, market research firm Strategy Analytics said.
The report said that worldwide shipments of set top DVD players will increase by 300 per cent this year and retail revenues across the United States, Europe and Japan will rise by 220 percent to $7 billion.
Rising hardware sales are being offset by falling prices, said Nick Griffiths, a senior analyst.
The average price of a DVD player in 2001 will fall to $200 in the United States and $270 in Europe, he said and added that Chinese-sourced DVD players are having a noticeable impact on the market.
"The content industry will ultimately benefit the most from DVD's success," Griffiths said.
"Manufacturers will continue to suffer from falling prices and declining margins, but DVD's superiority will tempt many consumers to replace their existing VHS collections," he said.
By the end of 2000, 14 per cent of U.S. and five per cent of European homes will own at least one DVD player, the report forecast.
In addition, many homes are acquiring DVD-capable PCs, so that overall household access to DVD will be 25 percent in the United States and 14 percent in Europe, Griffiths said.