DVD-Audio Poised To Cut Into CD Sales?

According to a recent report released by the International Recording Media Association (IRMA), with the gradual introduction of players for the developing DVD-Audio format finally taking place, the software replication industry can expect an "accelerated growth rate" for DVD-A titles around the world in the next two years.

The year 2000 has seen a rather soft launch for the new DVD-A format, and with this in mind, IRMA's Charles Van Horn adds that "the year 2001 will be the most likely introduction year, as replicators plan to have available some 40 million units for the new DVD-A players and combination models expected to reach the marketplace in greater numbers next year. Estimates say it will take 8 to 24 months to build a meaningful catalog of titles for DVD-A or other systems. Copy protection has been an additional issue and possible higher prices for DVD-A releases could also limit demand."

Despite the initial launch problems that plagued the format in recent months, IRMA's Optical Media Market Intelligence Service forecasts rapid growth for DVD-Audio, including a more than doubling of software from the 40 million units forecast to be manufactured in 2001 to 97 million replicated units worldwide in 2002. Van Horn thinks DVD-A will follow a similar path to that of the DVD-Video rollout, explaining that "DVD-V's highly competitive pricing at the retail level helped grow the market to some 194 million replicated units in 1999 worldwide, with a 474 million target this year."

Further, the IRMA study suggests the CD format will begin to see some erosion in sales after 2001 due to DVD-A and, possibly, the growth of SACD. Van Horn says that to compensate for the slide in CD sales, "existing CD participants would be expected to make up for the decline by replicating the new formats."

In addition to predictions about DVD-A disc production, IRMA is also reporting that, with better than expected sales of both CD and DVD products, the year 2000 will result in the first 10-billion unit replication year for optical media. According to IRMA, "strong numbers for the CD format and DVD format will lead the industry and help it achieve a 9% increase over 1999's total units replicated."

Van Horn notes that "it is especially noteworthy that CD is considered a mature format, having been introduced some 18 years ago. Nevertheless, CD realized a 4% gain in units replicated in 1999 over 1998. And, for this year, IRMA is projecting the format to increase nearly 5% over 1999's numbers." DVD-Video, representing a higher dollar content, provided replication of 194 million units worldwide in 1999, but will more than double that total in 2000 to reach some 474 million discs around the globe, according to IRMA's report.

Finally, IRMA's study reveals that CD-R discs have experienced tremendous growth, forecasting CD-R demand in 2000 will reach 2.25 billion units, up a whopping 375% from the 600 million units produced in 1998.