DVD surge no match for VHS erosion

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As expected, an exceptionally strong fourth quarter propelled consumer spending on DVD sales and rentals in 2006 to record heights, while the VHS death-march drag kept overall home entertainment spending flat with last year.

Combined DVD and VHS purchase and rental spending came in at $24.2 billion, just below the $24.3 billion consumers spent in 2005, according to numbers compiled by DEG: The Digital Entertainment Group and released Monday during the Consumer Electronics Show.

DVD sellthrough spending rose to $16.6 billion from $16.3 billion in 2005, while DVD rental spending grew to $7.5 billion from $6.5 billion. Both are record highs.

Dragging down overall home entertainment spending totals was the VHS phaseout. VHS spending, sellthrough and rental combined, eroded to a mere $1 million in 2006, the DEG estimates.
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