Ion --
This is a more-dynamic market than might first appear, with technology
spreading the use of optical disks to new applications. It makes it
an interesting and challenging question. It also means that data
comes from a variety of sources.
MAIN SOURCES OF DEMAND
----------------------
Even at the definition level, it's necessary to split the two basic
technologies into segments with their uses:
CD-Audio -- pre-recorded music
CD-ROM (pre-recorded) -- data storage
CD-RW (write-able) -- data storage, music
CD-Video -- video
DVD-Video -- video
DVD-ROM -- data storage
DVD-RW -- data storage, music
DVD-Audio -- music
Optical (MO, UDO) -- high capacity data storage (networks)
As these different versions of optical technology spread, we can
expect their applications to diversify. Write-able CDs and DVDs may
become widely used for archiving photos, catalog distribution,
replacement of microfilm, etc.
HOW FAR HAVE CDs/DVDs PENETRATED THEIR MARKETS?
-----------------------------------------------
Both technologies continue to add new applications, making this
difficult to measure. Even if the market is simply measured as
"households" and "personal computers," the penetration is more than
100%. This house has 6 CD players (2 car, 3 portable, 1 PC); and 3
DVD players (1 video and 2 in PCs). This is simply following the
pattern of other consumer electronics, where multiple devices appear
in the home as prices fall. As an example, there are currently more
than 4 color television sets in the average American home, according
to the Consumer Electronics Association. There are DVD players in 30
million American homes (of about 109 million households), with 20
million expected to be shipped this year, according to Television
Digest.
The Optical Storage Technology Association notes that CD-RW drives
will ship 50 million units worldwide in 2002. In addition 140
million DVD ROMs will ship worldwide. The U.S. will ship 45 million
PCs this year, about 40% of worldwide volume -- and systems that
aren't shipped with a CD-RW will be shipped with a CD-ROM or DVD-ROM.
Plus, the DVD-ROM is entering new markets, shipping 5.5 million units
in game consoles in 2001 (raising the installed base to 23.2 million
DVD-ROMs in games).
The jukebox market for MO and UDO drives is in its infancy. MO disks
are 5- or 9-gigabytes; UDO drives appearing this year are 20-gigabyte
and 40-gigabyte densities.
SHIPMENTS
---------
Before going into substitution factors, I though that I'd outline some
shipment numbers so that you can see trends. The majority of this
data comes from the International Recording Media Association (IRMA),
which keeps records on replication and some blank media, and the
Optical Storage Technology Association. The numbers are worldwide:
2000 (millions of units)
------------------------
CD-Audio: 4,537
CD-ROM (pre-recorded): 3,608
CD-RW (write-able):
CD-Video: 1,076
DVD-Video: 474
DVD-ROM: 21
DVD-RW:
DVD-Audio: 4
Blank VHS tapes: 1,409
2001 (millions of units)
------------------------
CD-Audio: 4,375
CD-ROM (pre-recorded): 3,350
CD-RW (write-able): 3,300
CD-Video: 1,104
DVD-Video: 849
DVD-ROM: 63
DVD-RW:
DVD-Audio: 16
Blank VHS tapes: 1,322
2002 (millions of units)
-------------------------
CD-Audio: 4,350
CD-ROM (pre-recorded): 3,245
CD-RW (write-able): 4,000
CD-Video: 1,129
DVD-Video: 1,320
DVD-ROM: 140
DVD-RW:
DVD-Audio: 50
VHS, Super 8 duplicates: 1,700
Blank VHS tapes: 1,195
2003 (millions of units)
------------------------
CD-Audio: 4,400
CD-ROM (pre-recorded): 3,000
CD-RW (write-able): 4,500
CD-Video:
DVD-Video: 1,700+
DVD-ROM:
DVD-RW:
DVD-Audio: 101
Blank VHS tapes:
SUBSTITUTION FACTORS/THREATS
-----------------------------
Each of the segments of this market face different threat, depending
on application.
CD-Audio: the Recording Industry Association of American (RIAA)
comments that shipments have been held down by use of CD-RW and MP3s
to copy and distribute music. The RIAA emphasizes “piracy” as the
reason, though U.S. law allows personal copying of music. As with
other sectors, magnetic media is a prime substitute, though both
sectors have grown substantially alongside each other. Shipments
declined because of lower shipments by music industry.
CD-ROM: DVD-ROM is the prime substitute. Some substitution by
magnetic media for OEM distribution of software.
CD-RW: this technology is supplanting tape, floppy disks, CD-ROM as
it grows rapidly. Only DVD-RW represents a likely threat, though
it’s just emerging and has two competitive formats. Excellent for
backup, long-term storage, being more stable than magnetic media over
time.
CD-Video: DVD-Video, direct satellite broadcast, VHS tape.
DVD-Video: CD-Video, direct satellite broadcast, VHS tape.
DVD-ROM: CD-ROM, DVD-RW, at the high end for storage-area networks
5-gigabyte magneto-optical (MO) and 20- or 40-gigabyte ultra-density
optical (UDO), used in jukeboxes.
DVD-RW: emerging technology competing with all other sectors;
advantages in density and speed; disadvantages are two competing
technologies, cost; low installed base.
DVD-Audio: primarily CD-Audio.
OTHER NOTES
-----------
There is not a huge amount of data on the Internet predicting
shipments of the media beyond 2003, but the shipment information on
DVD and DVD players above give a good idea of how installed bases and
usage are should grow. Assembling a forecast of drive shipments and
installed base would help you predict the future.
Here are some of the prime sources of information for this summary:
IRMA “Industry Statistics” (2002):
http://www.recordingmedia.org/news/statistics.html
For more details IRMA has a report,
"Worldwide Optical Media Market Intelligence Service 2001" priced at
$12,500:
http://www.recordingmedia.org/MIS/optical.html
Optical Storage Technology Association
“Optical Storage Technology Gains More Momentum” (undated)
http://www.osta.org/technology/pa.htm
DVDForum’s FAQ (undated):
http://www.dvdforum.com/tech-dvdprimer.htm
DVD+RW Alliance FAQ (undated):
http://www.dvdrw.com/faq.html
Document Imaging Report (Nov. 17, 2000):
http://www.readsoft.net/press/press_clips/DIR11-17-00.pdf
IRMA “Statistics Excerpted from Speeches” (2002):
http://www.recordingmedia.org/news/excerpts.html
Google search strategy:
“optical storage”
“worldwide CD sales” + blank
“optical jukeboxes” + “market size”
“storage area networks”
Best regards,
Omnivorous-GA |
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