DEG Urges Industry To Aggressively Promote HD Transition

Latest Data Cites Growing Sales in HD Impacting Demand for Content

July 18, 2007

At the Entertainment Merchants Association (EMA) trade show, DEG: The Digital Entertainment Group urged attendees to aggressively promote the transition to high definition across every product distribution channel. Recent data released illustrated growing consumer sales in high definition and declining demand for standard definition content. Latest sales figures show steady growth trends for HD products, including next generation disc players and game consoles; HDTV sets and broadcast, cable and satellite services and broadband video. Sales of DVD players were flat for the first half of the year with software shipments showing a mild decline. “As the trade association that represents manufacturers of both hardware and content, the DEG is dedicated to advancing the transition to a world of high definition,” said Steve Nickerson, Vice Chair of the DEG Communications Committee and Senior Vice President, Worldwide High Definition, Warner Home Video. “As such, we encourage the industry to take more aggressive action in the marketing and merchandising of high definition products so that we can help consumers transition from to a high definition experience, with retailers, and suppliers alike, benefiting from the growth this will bring to our industry.” U.S. HOUSEHOLD PENETRATION OF HDTVs REACHES MORE THAN 30 MILLION According to figures compiled by the DEG based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, an estimated 4.5 million HDTVs were sold to U.S. consumers in the first half 2007, which represents more than 50 percent growth over the same period last year. CEA further estimates that 16 million HDTVs will be sold in 2007, bringing the total sold in the U.S. to more than 52 million by the end of the year. According to figures compiled by the DEG, HDTV household penetration has now exceeded 30 million. Of all U.S. households, the DEG estimates that some 36 percent will have an HDTV by year’s end. In addition, approximately 20 percent of these HDTV households have more than one set. SALES OF HIGH DEFINITION MEDIA DEVICES REACH 2 MILLION UNITS High definition media devices – including set-top box and game consoles – are now available in some 10,000 storefronts in North America. These players sold through nearly two million units since launch in 2006, according to numbers compiled by the DEG with input from retail tracking sources. The high definition players – including Blu-ray Disc and HD DVD – are available at some 7,500 storefronts and are marketed from leading manufacturers. There are 12 models with prices from as low as $99 (manufacturers’ suggested retail price – street prices may vary). DVD PLAYER SALES FLAT FOR FIRST HALF OF YEAR According to figures compiled by the DEG based on data from CEA, retailers and manufacturers, an estimated 14 million DVD players were sold to U.S. consumers in the first half of 2007. Since launch in spring 1997, some 210 million DVD players, including set-top and portable DVD players, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combinations players, have sold to consumers, bringing the number of DVD households to 90 million (adjusting for households with more than one player). The DEG estimates that 57 percent of DVD owners have more than one player. DVD SOFTWARE SHIPMENTS SOFT IN FIRST HALF OF YEAR On the software side, more than 711 million DVDs shipped to retail and rental in the first half 2007, according to figures compiled by Swicker & Associates on behalf of the DEG. Shipments were down four percent over the same period last year. Since launch in 1997, nearly eight billion DVD units have been shipped.

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