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Evolution of Home Video Media Formats


According to Kegan Research, with the home video business fixated on a war between two incompatible next-generation systems, it is interesting to note there are actually four video formats active these days. And a shakeout looms.

In April, 2006, only one film will go out on VHS (an independent foreign picture) versus 24 two years ago. VHS is the 30-year-old cartridge tape format sinking into oblivion as a platform for pre-recorded software titles.

Today, the market is dominated by the standard definition DVD (S-DVD). But now two incompatible next-generation high-definition formats are about to launch: HD-DVD (championed by Toshiba) is scheduled to ship its first players in the U.S. later this month and Blu-ray (led by Sony) in late June. It�s not clear if both will survive, but shortly four formats will be active.

The overall home video market suddenly plateaued in 2005 and DVD sell-through revenue (excluding rental) grew approximately 6 percent to $16 billion, ending explosive growth (DVD sell-through grew 34 percent in 2004) since S-DVD's U.S. introduction in 1997. Video hardware and software marketers hope HD will spark resurgence.

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