DVD Entertainment Group

DVD SOFTWARE SALES DRIVE VIDEO INDUSTRY
TO RECORD BREAKING $20 BILLION YEAR

More Than 40 Million U.S. Households Own a DVD player

LAS VEGAS (January 9, 2003) - The stellar success of DVD has propelled home video to become America's most popular entertainment medium, surpassing consumer spending on movie tickets, music, video games and mass-market books. As announced today by the DVD Entertainment Group at the International Consumer Electronics Show (CES) in Las Vegas, U.S. consumers spent more than twice as much buying and renting DVDs and VHS as they did going to the movies. In 2002, consumers spent $20.3 billion buying and renting DVDs and VHS versus $9.3 billion moviegoers spent at the theatrical box office.

DVD now represents 57 percent of 2002 home video consumer spending, driven by DVD retail sales which increased 61 percent to $8.7 billion (compared with $5.4 billion in 2001). Consumers spent an additional $2.9 billion renting DVDs (more than double the $1.4 billion in 2001), bringing total DVD spending to $11.6 billion versus $6.8 billion in 2001 an increase of 71 percent.

Numerous DVD titles broke sales records in 2002 with many selling at least four million copies. Some of these titles include (in alphabetical order): "American Pie II" (Universal Studios Home Video), "Austin Powers in Goldmember" (New Line Home Entertainment), "Beauty and the Beast" (Buena Vista Home Entertainment), "Black Hawk Down" (Columbia TriStar Home Entertainment), "Harry Potter and the Sorcerer's Stone" (Warner Home Video), "Ice Age" (Twentieth Century Fox Home Entertainment), "Lilo and Stitch" (Buena Vista Home Entertainment), "The Lord of the Rings: The Fellowship of the Ring" (New Line Home Entertainment), "Men in Black II" (Columbia TriStar Home Entertainment), "Minority Report" (DreamWorks Home Entertainment), "Monsters, Inc." (Buena Vista Home Entertainment), "Ocean's Eleven" (Warner Home Video), "Spider-Man" (Columbia TriStar Home Entertainment), "Star Wars - Episode II: The Attack of the Clones" (Twentieth Century Fox Home Entertainment) and "Training Day" (Warner Home Video).

"Consumers have made it clear - DVD is their favorite way to enjoy entertainment at home. On average, each DVD household bought more than 15 DVD titles last year," said Emiel N. Petrone, chairman emeritus, DVD Entertainment Group. "By the end of 2003, DVD will be in more than half of U.S. homes, allowing even more consumers to experience the extraordinary video and audio quality DVD offers."

According to figures compiled by Ernst & Young on behalf of the DVD Entertainment Group, approximately 260 million units of DVD software shipped in the fourth quarter of 2002, a 90 percent increase over those shipped in the same quarter last year. In excess of 685 million software units were shipped in 2002 - more than the previous five years combined - bringing the total number of units shipped to 1.36 billion since launch.

	1997	1998	1999	2000	2001	2002
Total Per Year	5.5	25.1	98.0	182.4	364.4	685.0
TOTAL SINCE LAUNCH		30.6	128.6	311	675.4	1,360

North American figures compiled by Ernst & Young on behalf of the DVD Entertainment Group

There are nearly 20,000 DVD titles currently available, up from nearly 9,000 just two years ago.

Just as movies on DVD provide an enhanced viewing experience, music on DVD delivers superior surround sound and added features for music enthusiasts.

There are currently more than 2,000 DVD music video titles available ranging from classic artists such as Eric Clapton (Warner), Paul McCartney (Capitol), David Bowie (Virgin) and James Taylor (Columbia) to recent sensations crossing a variety of genres such as Shania Twain (Mercury Nashville), Korn (Epic), Jimmy Eat World (DreamWorks) and Dave Matthews Band (RCA).

In addition, there is growing enthusiasm for DVD-Audio. There are approximately 300 titles currently available in the U.S. with hit artists such as Linkin Park (Warner Bros.), Missy Elliott (Elektra), Dishwalla (immergent), Faith Hill (Warner Bros.), Aaron Neville (Silverline), Yes (Rhino), Disturbed (Reprise), Al Green (EMI), Graham Nash (DTS Entertainment), Elvis (RCA/BMG) and The Beach Boys (Capitol). A steady flow of DVD-Audio titles is anticipated for release in 2003, with an estimated 250 titles coming to retail throughout the year.

Twelve leading manufacturers offer more than 50 DVD-Audio capable players including a variety of models from set-top and portable players to car models and Home Theater in a Box systems.

According to figures compiled by the DVD Entertainment Group based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, more than 25 million DVD players were sold to consumers in 2002, a 50 percent increase over 2001, bringing the number of DVD households to more than 40 million. More than 10 million homes have two or more DVD players. There are currently more than 95 million DVD playback devices in American homes, including set top players, DVD-ROM drives and DVD-capable video game machines.

	1997	1998	1999	2000	2001	2002
TOTAL PER YEAR	300,000	950,000	3,550,000	9,900,000	16,700,000	25,100,000
TOTAL SINCE LAUNCH		1,250,000	4,800,000	14,700,000	31,400,000	56,500,000

Includes set-top and portable DVD players, Home Theater in a Box systems, TV/DVD and DVD/VCR combination players. - DVD Entertainment Group

The surge in DVD hardware sales was the bright spot for the consumer electronics industry and the primary source of continued growth for retailers. In 2002, DVD hardware (including set-top and portable DVD players, Home Theater in a Box systems, TV/DVD and DVD/VCR combination players) represented more than $3.6 billion in retail sales according to figures compiled from the NPD Group data.

Consumers purchased 25 million units in the U.S. in 2002 bringing the total number of players sold to approximately 56.5 million units. The DEG estimates that DVD players will be in 55 million -- more than half -- of U.S. homes by the end of 2003.

There are now more than 250 DVD player models marketed under 60 different consumer electronics brands. DVD players are available at most consumer electronics retailers and have become the focal point of the home theater category. There are also an expanding variety of DVD players available, with Home Theater in a Box systems, car players, DVD-Video/Audio combination players, portables, recordable units and TV/DVD combination systems all growing in popularity.

The DVD Entertainment Group is a Los Angeles-based, industry-funded nonprofit corporation that advocates and promotes the benefits of DVD-Video and DVD-Audio, and provides updated information to the media and the retail trade about DVD players and titles. The DEG also provides a platform where home entertainment companies come together to analyze, evaluate and discuss current, emerging and future technologies and formats for the home entertainment market.

Regular members of the DVD Entertainment Group are 5.1 Entertainment Group, Artisan Home Entertainment, Buena Vista Home Entertainment, Columbia TriStar Home Entertainment, DreamWorks Home Entertainment, DTS Entertainment, EMI Recorded Music, Funai Corporation, HBO Video, Image Entertainment, JVC Company of America, MGM Home Entertainment, New Line Home Entertainment, Panasonic Consumer Electronics, Paramount Home Entertainment, Philips Consumer Electronics, Pioneer Electronics (USA), Sony Electronics, Sony Music Entertainment, Thomson Multimedia, Toshiba America Consumer Products, Twentieth Century Fox Home Entertainment, Universal Music Group, Universal Studios Home Video, Warner Home Video and Warner Music Group.

Associate members are Alta Resources, Blink Digital, Clear-Vu Products, Crest National, Deluxe Media Services, Digital Video Compression Corporation, InterActual Technologies, Media Copy, Panasonic Disc Services, Sonopress, Sony Disc Manufacturing, Sony Pictures Digital Authoring Center and Technicolor.

Interested consumers can reach the DVD Entertainment Group at (310) 967-2953, via e-mail at getinfo@dvdinformation.com or through its web site at www.dvdinformation.com.