DVD-R sales slower than expected

DSN Retailing Today, March 28, 2005 by Doug Desjardins

Even though 2004 was supposed to be a breakout year for DVD recorder sales, retailers never saw the holiday rush some analysts expected. The Consumer Electronics Association was projecting 2004 sales of 1.5 million units for DVD players that can record programs on blank discs, but the final numbers fell well short of that estimate.

"We had 800,000 players ship to retailers in 2004," said CEA senior analyst Scan a Wargo. "That was an increase over 550,000 in 2003 but much lower than we expected."

Wargo said price was the main reason shoppers passed on DVD recorders last year. Analysts expected prices to plummet well below $200 by the end of the year but low demand kept prices high. "You can buy a DVD player for $50 but a DVD recorder still costs at least $200," said Wargo. "When you have a price differential of $150, that's pretty significant."

And prices aren't showing any sign of falling soon. Most DVD recorders are priced over $300 with lower-end models selling for $199. The lowest price found on a search of retailer Web sites was $179 for a model from CyberHome.

Despite the 2004 shortfall--and a slow start in 2005 with less than 50,000 units sold in January--the CEA is still projecting 2005 sales of 1.8 million for DVD recorders, an estimate based in part on prices dropping this fall.