DVD disc demand comes close to CDs in 2006, reports Japanese association

Japan Recording-Media Industries Association (JRIA) unveiled estimated shipments for 2005 and demand projection for 2006 of recording media, e.g. optical discs and magnetic tapes. The association estimated one-time recording DVD disc shipments in 2005 to jump 2.7 times year-on-year to 3,643 million units, surpassing the year before projection of 2,153 million units (PEN News Weekly Nov. 12, 2004) and growth will continue well into 2006. All the traditional magnetic recording media sales plunged by 15 percent to 25 percent except for Mini DV cassette tape for camcorder use, which managed to maintain the year ago level.

The world demand for one-time recording DVD-R/+R discs in 2006 will increase 42 percent to 5,159 million units and rewritable models up 32 percent to 382 million, totaling 5,541 million, a 41 percent gain. The strong demand projection is based on the fact that most of personal computers mount a DVD drive as standard device. And reduced street price of discs is another factor for increasing demand. Standard five-disc pack DVD-R sells for around ¥1,000 (US$8.40/US$1.70 per disc) on the street and a pack of five DVD-WRs for around ¥2,500 (US$20.80/US$4.20 per disc). It is anticipated DVD-R will surpass the CD-R for computer data storage on its merit of larger memory capacity. Japanese are currently heavy users of DVD-RWs compared with other regions for use in recording TV programs. The domestic market may take a 30 percent share of the world.

The association included 8cm DVD discs for the use of a DVD camcorder, whose share is mounting to take some 30 percent of all digital camcorders. The dissemination in the United States is particularly high surpassing other regions and demand for media took more than 50 percent of the aggregate.

Production of both DVD formats of one-time recording -R/+R and rewritable -RW continue growing in 2006 by 42 percent and 32 percent, respectively. Combined production volume will come to 6.1 billion units. The share of Japanese makers continues shrinking in every product category except for miniDV for camcorder use. Japanese makers will take some 40 percent in DVD-R production volume, declining from 56 percent in 2004. The share of overseas manufacturers is increasing with consequent price fall, thus Japanese firms look forward to earlier introduction of the next-generation DVD discs, but unified standardization process came to a deadlock and two formats of Blu-ray and HD-DVD are expected to be on the market.

Sales of CD-R/RW in 2005 leveled at 8,179 million units and the JRIA projects the world demand in 2006 will drop 3 percent to 7,905 million units, the first-ever decline. The association anticipates the demand will continue falling replaced by DVD-R for computer data storage. Media for music recording will drop due mainly to emerging popularity of personal media recorders which use HDD or flash memory card for storage.

The association estimates the 2005 sales ended in 13 percent decline to 52.2 million units, attributing the sluggish sales to mainly a decline of supply of small capacity cards when purchase of digital cameras and cell phones. For 2006, demand will rise again due mostly to expected demand for cell phones whose functions are improved and memory card usage will increase. Another factor is emerging PMPs, such as Apple's iPod and Sony's Walkman digital player. The association projects a 7 percent gain to 55.7 million units for 2006.