DVD surge no match for VHS erosion


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.