DVD Players & Audio Products Drive Third Quarter Growth In Home Theatre Sales

Factory-to-dealer sales of home theater products were up yet again in the third quarter of 1999, according to the Consumer Electronics Association (CEA - formerly CEMA), totaling just over $2.65 billion and representing a 15 percent increase over third quarter 1998 figures. The continued growth brought year-to-date sales revenues to $6.5 billion, up 10 percent over the first three quarters of 1998.A key factor in the growth of the home theater sector has been the incredible sales of DVD-Video players this year. More than 10 percent of total home theatre revenues in both the quarter and year-to-date figures came from sales of DVD-Video players, which total $672 million in sales so far this year. Factory sales of DVD-Video players in the third quarter alone totaled $296 million, up from $108 million in the first three quarters of 1998.The other fueling factor in the third quarter was sales of audio home theater products. As a subgroup, sales of audio home theatre products grew by 16 percent, bringing year-to-date sales to $600 million, and 2 percent ahead of the first three-quarters of last year. Two components of the audio home theater product category with notable sales increases were A/V receivers and home theatre-in-a-box packages. Sales of A/V receivers in the third quarter climbed 24 percent to $134 million, while home theatre-in-a-box sales grew by 19 percent to $78 million.In the video components subcategory, total sales were up by 14 percent, totaling $2.4 billion. This growth was largely due to a 12 percent increase in sales of direct view televisions measuring 25 inches and greater. Direct view televisions of this size are by far the single largest subcategory of video components, and contributed to nearly half of all home theater revenues during the quarter and throughout the year.In the blank media category, unit sales increases of 13 percent in VHS videotapes and 27 percent in compact format videocassettes (VHS-C, DVC and 8mm) have helped to drive overall sales of blank media up 3 percent thus far this year.Revenues from the sale of compact format videocassettes grew by 23 percent in the third quarter to $52 million. Previously only a footnote in the larger blank media category, this segment of the market accounted for 25 percent of all revenues in blank media sales during the third quarter.