The home entertainment boom that started in the late 1990s has not yet ended and although a number of sectors have been strongly affected by adverse economic conditions, forecasts for the market until 2007 are generally positive.

The home entertainment market is taken as referring to audio and visual products, as well as to home-use personal computers (PCs) and games consoles. The boom in home entertainment that characterised the late 1990s has not yet ended, although a number of sectors have been strongly affected by adverse economic conditions. At present, weak sales in some areas are outweighed by the success of some of the larger sectors. Forecasts for the market until 2007 are generally positive, although there is likely to be a flattening out in the near term, as decreased demand continues to be fought by price cuts. However, the established role of electronic equipment in the home is unlikely to suffer in the long run, and the market is forecast to return to strong growth.

(PRWEB) August 29, 2003 -- Research and Markets have announced the addition of the "Home Entertainment Masket Assessment 2002" report to their offering.

This report considers the UK home entertainment market. Historical market data from 1997 onwards is given to assist in an understanding of general trends in the market. The different sectors of this market are examined, along with the possibility of the convergence of the different technologies and media that make up these sectors.

The home entertainment market is taken as referring to audio and visual products, as well as to home-use personal computers (PCs) and games consoles. Some of the boundaries between these sectors have blurred slightly with the introduction of new formats, such as digital versatile disc (DVD) for video and audio equipment, and the inclusion of audiovisual equipment in PCs. However, convergence has been, and is likely to be, less dramatic than is often thought and individual sectors can still be considered in relative isolation.

The boom in home entertainment that characterised the late 1990s has not yet ended, although a number of sectors have been strongly affected by adverse economic conditions. At present, weak sales in some areas are outweighed by the success of some of the larger sectors, but this is not guaranteed to continue. The major equipment manufacturers have been inventive in creating new markets and growth in existing ones, as improvements in the entertainment experience, mainly through technological innovation, have increased replacement sales. The take-up of large-screen and wide-screen televisions (TVs) has continued, reinvigorating a mature market, and UK consumers have embraced the new DVD technology enthusiastically. However, campaigns to market personal MiniDisc (MD) players and audio separates, as opposed to systems, have met with more qualified success in terms of overall value growth.

The main difficulty experienced by suppliers in the home entertainment market continues to be rapid price erosion. The difficulty of maintaining demand for products at their entry price brings prices down, which, in turn, leads to expectations among consumers that the same will happen with the next product. Aggressive marketing strategies to compel consumers to spend more on better equipment worked during the affluent late 1990s, but have worked in fewer and fewer sectors in 2001 and 2002. In the PC market, for instance, advertising expenditure is directed towards campaigns for discounted machines of extremely high specification, the reverse of the tactics of the TV sector. Of the three sectors to have experienced strong recent growth - TV, DVD and games consoles - only TV seems likely to continue that growth beyond 2003.

We have commissioned exclusive consumer research from NOP for this report. 1,024 adults were interviewed from 1st to 6th August 2002, and their attitudes towards home entertainment equipment, new technology and preferred methods of purchasing were established. Intentions to buy TV sets, DVD players and MP3 (Moving Picture Experts Group Layer-3 Audio) players in the next 12 months were also recorded. Analysis of the responses led to some interesting findings. Consumers seem to be considerably more price sensitive than they were in 2000, at the time of our last Market Assessment report on this market. On the other hand, there is much less confusion about digital technology than there was in 2000, suggesting that one obstacle to the success of the new technology in increasing replacement sales has been removed. The much-heralded importance of the Internet to the future of home technology and entertainment received little support from the survey, with respondents seeming largely indifferent to Internet connectivity in new products.

The consumer attitudes survey also indicated that there will continue to be strong demand for TVs and DVD players until at least mid-2003. However, interest in MP3 players was much more muted.

When respondents were asked about where they prefer to go to buy home entertainment equipment, a preference for High Street stores was clear. Smaller, independent stores are still the choice of a minority, but nonetheless of a larger minority than that interested in the Internet.

Advertising expenditure decreased considerably over the year ending June 2002 as suppliers saw their profit margins squeezed and demand fell. However, there are notable exceptions to this pattern, with some sectors seeing considerable increases in expenditure. The TV sector goes against the grain in this area too.

This report also takes into account the effect that external factors have had and will have on sales in the home entertainment market. Important examples include levels of consumer spending and changes in the structure of the UK population. Forecasts for the market until 2007 are generally positive, although there is likely to be a flattening out in the near term, as decreased demand continues to be fought by price cuts. However, the established role of electronic equipment in the home is unlikely to suffer in the long run, and the market is forecast to return to strong growth by 2001.

For a complete index of this report click on http://www.researchandmarkets.com/reports/35077

REPORT DATA SUMMARY:
Home Entertainment Masket Assessment 2002
Category: Media & Entertainment
URL: www.researchandmarkets.com/reports/35077

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