2002 mpaa market stats 60 pages

1MPA Worldwide Market Research

U.S. Entertainment Industry: 2002 MPA Market Statistics



• Box Office ……………………………………………………………...……………………………… 3-6• Admissions ..………………………………………………………………………………..………… 7-10• High Grossing Films ..…………………………………………………………………….………… 11• Films Released .……….………………………………………………………..……...……………. 12-14• Ratings ……….……….…………………………………………………………..…...……………… 15-16• Theatrical …….……….…………………………………………………………..…...……………… 17-26

– Negative Costs ………………………………. 17-19– Marketing Costs ……………………………… 20-22– Screens …………………………………….…. 23-24– Theaters ………………………………………. 25-26

• Employment …….……….……………………………………………………...…...……………… 27-28• Home Video ....……….……………………………………………...……………………....……… 29-36

– VCR Statistics ………………………….……. 29-30– DVD Statistics ……………………….………. 30-36

• Television ....……….……………………………………………...……………………...…....…… 37-46– Television Statistics…………………………. 37-39– Cable Statistics………………………………. 40-46

• Technology ....……….……………………………………………...………………………....…… 47-56– PC Statistics …………………………...……. 47-49– Internet Statistics ……………………...……. 50-56

• Media Consumption ...……………………………………………...………………..…………… 57-60

Table of Contents



Source: MPAA

Box Office

Box Office Trends

7.0

7.5 7.7

8.4

9.5

6.0

7.0

8.0

9.0

10.0

1998 1999 2000 2001 2002

Bill

ions

$

7.2%

2.9%

9.8%

13.2%

US box office in 2002 reached an incredible $9.5 billion -- showing a hearty increase of 13%. Although alternative entertainment options (such as DVD and Pay-Per-View) have caught the consumers’ attention, going to the theater remains a US past time.



Source: MPAA

Box Office

Box Office GrowthYear Prev. Period 2002 vs.

2002 $9,519.6 13.2% -2001 8,412.5 9.8 13.2%2000 7,660.7 2.9 24.31999 7,448.0 7.2 27.81998 6,949.0 9.2 37.01997 6,365.9 7.7 49.51996 5,911.5 7.6 61.01995 5,493.5 1.8 73.31994 5,396.2 4.7 76.41993 5,154.2 5.8 84.71992 4,871.0 1.4 95.41991 4,803.2 (4.4) 98.21990 5,021.8 (0.2) 89.61989 5,033.4 12.9 89.11988 4,458.4 4.8 113.51987 4,252.9 12.6 123.81986 3,778.0 0.8 152.01985 3,749.4 (7.0) 153.91984 4,030.6 7.0 136.21983 3,766.0 9.1 152.81982 3,452.7 - 175.7

Box Office Gross

(USD in MM)

% Change

Box Office was up 13.2% from 2001 , the highest year-to-year increase in 20 years.

Box Office has increasedover $6 billion since 1982.

In a 15 year period, box office continued to grow -more than doubling grosses from 1987.



Source: Variety

Box Office

2002 High Grossing Opening Weekend

Rank Title Distributor Release DateBox Office ($US mil)

1 Spider-Man Sony May 3rd $114.802 Harry Potter; Chamber of Secrets Warner Bros. November 11th 88.43 Star Wars II: Attack of the Clones Fox May 16th 80.04 Austin Powers: Goldmember New Line July 26th 73.15 Lord of the Rings: Two Towers New Line December 18th 60.26 Signs Buena Vista August 2nd 60.17 Scooby Doo Warner Bros. June 14th 54.28 Men in Black 2 Sony July 3rd 52.19 8 Mile Universal November 8th 51.2

10 Die Another Day MGM November 22nd 47.111 Ice Age Fox March 15th 46.312 XXX Sony August 9th 44.513 Mr. Deeds Sony June 28th 37.214 Red Dragon Universal October 4th 36.515 The Scorpion King Universal April 19th 36.116 Minority Report Fox June 21st 35.717 Sweet Home Alabama Buena Vista September 27th 35.618 Lilo & Stitch Buena Vista June 21st 35.319 Blade 2 New Line March 22nd 32.520 The Sum of All Fears Paramount May 31st 31.2

Spider-Man, the #1 blockbuster for 2002 also ranked #1 for opening weekend grosses at $115 million. An additional 7 films grossed over $50 million in their first weekend.



Source: MPAA

4th quarter proved to be the strongest once again in 2002 - at $2.7 billion, the 4th quarter represents 28% of the total 2002 box office.

Box Office

Quarterly Box Office

Quarter 2001 2002Q1 $1,811.7 $1,991.9 9.9%Q2 1,891.5 2,490.8 31.7Q3 2,267.4 2,334.1 2.9Q4 2,441.8 2,702.8 10.7

Year $8,412.5 $9,519.6 13.2%

USD in millions% Change

4th Qtr 2001 Box Office Hits 4th Qtr 2002 Box Office Hits

Rank TitleBox Office* ($US mil)

1 Harry Potter: Chamber of Secrets 247.42 Lord of the Rings: Two Towers 236.03 Die Another Day 150.84 The Santa Clause 2 137.55 The Ring 127.0

Top 5 Total: $898.7

Rank TitleBox Office* ($US mil)

1 Harry Potter: Sorcerer's Stone 294.72 Monsters, Inc. 240.83 Lord of the Rings: Fellowship 182.54 Ocean's Eleven 140.95 Training Day 76.3

Top 5 Total: $935.2

*Box Office = total year, not 4th qtr. receipts



Admissions

Admissions Trends

1.64

1.49

1.421.47

1.48

1.3

1.4

1.5

1.6

1.7

1998 1999 2000 2001 2002

Bill

ions

-1.0%

-3.0%4.7%

10.2%

Note: Based on NATO average ticket priceSource: MPAA



Admissions

Admissions Growth Year Admissions Prev. Period 2002 vs.2002 1,639.3 10.2% -2001 1,487.3 4.7 10.2%2000 1,420.8 (3.0) 15.41999 1,465.2 (1.0) 11.91998 1,480.7 6.7 10.71997 1,387.7 3.7 18.11996 1,338.6 6.0 22.51995 1,262.6 (2.3) 29.81994 1,291.7 3.8 26.91993 1,244.0 6.0 31.81992 1,173.2 2.9 39.71991 1,140.6 (4.0) 43.71990 1,188.6 (5.9) 37.91989 1,262.8 16.4 29.81988 1,084.8 (0.3) 51.11987 1,088.5 7.0 50.61986 1,017.2 (3.7) 61.21985 1,056.1 (11.9) 55.21984 1,199.1 0.2 36.71983 1,196.9 13.3 37.01982 1,056.1 - 55.2

% Change

Note: 1989 to present based on NATO average ticket priceSource: MPAA

Over the past 20 years, admissions have continued to rise even with the emergence of home entertainment, the internet and other multimedia technologies.

In 2002 admissions grew 10.2% over 2001 -- the highest increase since 1957.



Admissions per capita continued to rise in 2002, U.S. residents attended an average of 5.7 movies.

Admissions

Admissions Trends Per Capita

5.7

5.3

5.2

4.8

4.6

4.8

4.44.5

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

19801985

19901992

19952000

20012002

Adm

issi

ons

Source: MPAA



Note: NATO average ticket price based on NSNB survey and reflects average price paid for all admissions to movie theaters, inclusive of first run, subsequent runs, senior citizens, children, and all special pricing.

Average Annual Admission Price

Admissions

Year Prev. Period 2002 vs.2002 $5.81 2.7% - 2.42001 5.66 4.9 2.7% 1.62000 5.39 6.1 7.7 3.41999 5.08 8.3 14.2 2.71998 4.69 7.9 23.7 1.61995 4.35 4.8 33.5 1.71992 4.15 (1.7) 39.9 2.91990 4.23 19.0 37.4 3.31985 3.55 31.9 63.6 2.51980 2.69 -- 115.8 2.7

% Change CPI

% ChangeAvg. Annual Admission Price (USD)

Source: MPAA



Film Rental

Number of High Grossing Features: Film Rentals

14 1316 16

19

563

120

4

8

12

16

20

1998 1999 2000 2001 2002

50 mil + 100 mil +

Source: MPAA

Total Box OfficeLord of the Rings: Two Towers $268.7Ice Age 176.4Die Another Day 154.7Scooby-Doo: The Movie 153.3A Beautiful Mind 149.5Lilo & Stitch 145.8Santa Clause 2 138.4Minority Report 132.0Lord of the Rings: Fellowship 130.9Sweet Home Alabama 126.2Mr. Deeds 126.2The Bourne Identity 121.5The Sum of All Fears 118.58 Mile 115.4Total $2,057.4% of Total Box Office 22%

Titles grossing >$50 Million

Total Box OfficeSpider-Man $403.7Harry Potter: Chamber Of Secrets 253.0Signs 227.8Austin Powers in Goldmember $213.1Men in Black 2 190.4Total $1,288.1% of Total Box Office 14%

Titles grossing >$100 Million



Year Produced Rated Released2002 543 786 4672001 611 739 4822000 683 762 4781999 758 677 4611998 686 661 5091997 767 673 5101996 735 713 4711995 631 697 511

Number of Theatrical Films Produced, Rated, & Released

Films Released

Note: Films rated may be higher than films produced for a given year because films may be rated or rerated months or even years after production.

Source: MPAA



482509511

475461 467490458 462470

449442

17 2041 19 19 180

100

200

300

400

500

600

1995 1998 1999 2000 2001 2002

Total New Releases Reissued

Source: MPAA

Films Released in the US

Films Released



Year MPAAAll Other

DistributorsTotal New Releases MPAA

All Other Distributors

Total Reissues

2002 220 229 449 5 13 182001 188 274 462 8 13 212000 191 267 458 6 11 171999 213 229 442 5 14 191998 221 269 490 14 5 19

New Films Reissued Films

Feature Films Released in the US

Films Released

Average Box Office of New Releases

YearAll New

ReleasesMPAA New Releases

2002 $21.2 $32.52001 18.2 34.82000 16.7 30.01999 16.9 27.1

The number of films released in 2002 dipped slightly (3%), however the average box office/title increased. In 2002, films grossed an average of $21.2 million.

Source: MPAA



Ratings

NC-17/X2%

R58%

G7%

PG22%

PG-1311%

Source: MPAA

Percent of films by Rating 1968 to 2002

Rank Title DistributorBox Office ($US mil) Rating

Release Date

1 The Lion King Buena Vista 312.9 G Jun-942 Monsters, Inc. Buena Vista 255.9 G Dec-013 Toy Story 2 Buena Vista 245.9 G Nov-994 Aladdin Buena Vista 217.4 G Nov-925 Toy Story Buena Vista 191.8 G Nov-95

1 Star Wars Fox 461.0 PG May-772 E.T. Universal 435.0 PG Jun-823 Star Wars: Phantom Menace Fox 431.1 PG May-994 Harry Potter: Sorcerer's Stone Warner Bros. 317.6 PG Nov-015 Star Wars: Attack of the Clones Fox 310.3 PG May-02

1 Titanic Paramount 600.8 PG-13 Dec-972 Spider-Man Sony 403.7 PG-13 May-023 Jurassic Park Universal 357.1 PG-13 Jun-934 Forrest Gump Paramount 329.7 PG-13 Jul-945 Lord of the Rings: Fellowship of the Ring New Line 313.4 PG-13 Dec-01

1 Beverly Hills Cop Paramount 234.8 R Dec-842 The Exorcist Warner Bros. 232.7 R Dec-733 Saving Private Ryan Dreamworks 216.2 R Jul-984 Terminator 2 TriStar 204.8 R Jul-915 Gladiator Dreamworks 187.7 R May-00

Top Grossing Films by Rating 1968 to 2002



RatingsThe success of 2002 is essentially due to the success of PG-13 films. PG-13 films made up 65% of the top 20 films in 2002, while R rated films were not represented in the top 20 for the first time in two years.

PG-1365%

R0%

G5%

PG30%

Source: MPAA

2002 Top 20 Grossing Films 2002 Top 20 Films by Rating

13

Year G PG PG-13 R2002 5% 30% 65% 0%2001 10% 20% 55% 15%2000 5% 15% 60% 20%

Top 20 Grossing

Rank Title DistributorBox Office (USD MM) Rating

1 Spider-Man Sony $403.7 PG-132 Star Wars II: Attack of the Clones Fox 310.3 PG3 Lord of the Rings: Two Towers New Line 268.7 PG-134 Harry Potter: Chamber of Secrets Warner Bros. 253.0 PG-135 My Big Fat Greek Wedding IFC 228.8 PG6 Signs Buena Vista 227.8 PG-137 Austin Powers in Goldmember New Line 213.1 PG-138 Men in Black 2 Sony 190.4 PG9 Ice Age Fox 176.4 PG

10 Die Another Day MGM 154.7 PG-1311 Scooby-Doo Warner Bros. 153.3 PG12 A Beautiful Mind* Universal 149.5 PG-1313 Lilo & Stitch Buena Vista 145.8 PG14 XXX Sony 141.2 PG-1315 The Santa Clause 2 Buena Vista 138.4 G16 Minority Report Fox 132.0 PG-1317 Lord of the Rings: Fellowship* New Line 130.9 PG-1318 The Ring Dreamworks 127.3 PG-1319 Sweet Home Alabama Buena Vista 126.2 PG-1320 Mr. Deeds Sony 126.2 PG-13

61



Source: MPAA

MPAA Member Company Average Theatrical Costs

Theatrical

9.44.3

16.8

6.526.8

12.0

36.4

17.7

52.7

25.3

51.5

24.5

54.8

27.3

47.7

31.0

58.8

30.6

0

20

40

60

80

100

1980 1985 1990 1995 1998 1999 2000 2001 2002

Negative Costs Marketing Costs

13.723.3

38.8

54.1

78.0 76.0 82.1 78.7

13.6% 89.4 14% increase in average theatrical costs can be attributed to the increase in member company negative costs.



Source: MPAA

Theatrical

21.8

5.5

18.4

6.5

21.8

9.7

31.5

9.5

34.0

11.2

0

10

20

30

40

50

1998 1999 2000 2001 2002

Negative Costs Marketing Costs

27.324.9

31.5

41.045.2

MPAA Member Subsidiary / Affiliate Average Theatrical Costs

10.2%



Source: MPAA

MPAA Average Negative Costs *

Theatrical

Prev. Period 2002 vs.2002* $58.8 23.3% -2001* 47.7 (13.0) 23.3%2000* 54.8 6.5 7.3 1999 51.5 (2.3) 14.3 1998 52.7 44.8 11.6 1995 36.4 35.8 61.6 1990 26.8 59.6 119.5 1985 16.8 78.8 250.4 1980 9.4 - 526.6

% ChangeAverage Negative Cost Per Feature

(USD in MM)Year

(includes production costs, studio overhead and capitalized interest)

* Due to changes in financial reporting regulations, abandoned project costs are no longer included in studio overhead, and as such are no longer a part total Negative Costs.

MPAA Subsidiary/Affiliate Average Negative Costs *

Prev. Period 2001 vs.2002* $34.0 8.0% -2001* 31.5 46.6 8.0%2000* 21.5 16.9 58.3 1999 18.4 (15.6) 85.1 1998 21.8 - 56.2

% ChangeAverage Negative Cost Per Feature

(USD in MM)Year

(includes production costs, studio overhead and capitalized interest)

* Subsidiaries include studio “classics” divisions such as Sony Pictures Classics, Fox Searchlight, New Line, Miramax, etc.



Source: MPAA

MPAA Member Company Average Marketing Costs of New Feature Films

Theatrical

Year Print Advertising Total P&A2002 $3.31 $27.31 30.622001 3.73 27.28 31.012000 3.30 24.00 27.301999 3.13 21.40 24.531998 3.25 22.07 25.321995 2.35 15.38 17.731990 1.73 10.24 11.971985 1.21 5.24 6.45

All amounts USD in millions

MPAA Member Subsidiary*/ Affiliate Average Marketing Costs of New Feature Films

Year Print Advertising Total P&A2002 $1.42 $9.76 11.182001 1.21 8.29 9.502000 0.75 8.96 9.711999 0.78 5.74 6.521998 0.62 4.86 5.48

All amounts USD in millions

* Subsidiaries include studio “classics” divisions such as Sony Pictures Classics, Fox Searchlight, New Line, Miramax, etc.

1.2%



Other Media includes:• Cable TV/Network TV• Network Radio• Spot Radio• Magazines• Billboards

Other Non-Media includes:• Production/Creative Services • Exhibitor Services• Promotion & Publicity• Market Research

Source: MPAA

MPAA Member Company Distribution of Advertising Costs by Media

Theatrical

Other Non-Media19%

Other Media21%

Network22%

Newspaper14%

Internet/ Online

1%

Spot TV18%

Trailers5%

Year Total $ Newspaper Network Spot TVInternet/ Online Trailers

Other Media

Other Non-Media

2002 $27.31 13.5% 23.0% 17.6% 0.9% 4.5% 21.4% 19.1%2001 27.28 13.1 25.4 16.9 1.3 5.1 20.2 17.92000 24.00 15.6 23.8 18.3 0.7 6.4 18.8 16.31999 21.40 17.6 23.5 19.8 0.5 7.8 15.4 15.51998 22.07 15.9 24.1 18.2 NA 4.7 18.2 18.9

% of Total



MPAA Member Company Subsidiary* / Affiliate Distribution of Advertising Costs by Media

Theatrical

Source: MPAA* Subsidiaries include studio “classics” divisions such as Sony Pictures Classics, Fox Searchlight, New Line, Miramax, etc.

Other Media includes:• Cable TV/Network TV• Network Radio• Spot Radio• Magazines• Billboards

Other Non-Media includes:• Production/Creative Services • Exhibitor Services• Promotion & Publicity• Market Research

Year Total $ Newspaper Network Spot TVInternet/ Online Trailers

Other Media

Other Non-Media

2002 $11.18 22.0% 25.7% 5.6% 0.9% 6.1% 21.1% 18.6%2001 8.29 18.6 42.8 3.2 0.4 5.2 9.9 19.92000 8.96 20.5 36.4 6.1 0.5 5.5 13.8 17.31999 5.74 23.8 35.4 6.8 0.3 4.1 10.5 19.11998 4.86 23.5 42.2 3.6 NA 4.1 3.6 19.0

% of Total

Other Non-Media19%

Other Media21% Network

25%

Newspaper22%

Internet/Online

1%

Spot TV6%

Trailers6%



Source: MPAA

Total Number of Screens

Theatrical

YearTotal

Screens% Change

2002 vs.Indoor

Screens% Change

2002 vs.Drive-In Screens

% Change 2002 vs.

2002 35,280 - 34,630 - 650 -2001 36,764 -4.0% 36,110 -4.1% 654 -0.6%2000 37,396 (5.7) 36,679 (5.6) 717 (9.3)1999 37,185 (5.1) 36,448 (5.0) 737 (11.8)1998 34,186 3.2 33,440 3.6 746 (12.9)1995 27,805 26.9 26,958 28.5 847 (23.3)1990 23,689 48.9 22,774 52.1 915 (29.0)1985 21,147 66.8 18,327 89.0 2,820 (77.0)1980 17,590 100.6 14,029 146.8 3,561 (81.7)



Source: Texas Instruments

Theatrical

1231

45

124

0

20

40

60

80

100

120

140

1999 2000 2001 2002

Digital Cinema Screens



Source: MPAA

Total Number of Theaters

Theatrical

YearTotal

Theaters% Change 2002 vs.

Indoor Theaters

% Change 2002 vs.

Drive-In Theaters

% Change 2002 vs.

2002 6,050 - 5,635 - 415 -

2001 7,070 -14.4% 6,596 -14.6% 474 -12.4%

2000 7,421 (18.5) 6,909 (18.4) 512 (18.9)

1999 7,551 (19.9) 7,031 (19.9) 520 (20.2)

1998 7,418 (18.4) 6,894 (18.3) 524 (20.8)

1995 7,744 (21.9) 7,151 (21.2) 593 (30.0)

5.2

5.3

5.5

6.1

5.2

5.4

5.6

5.8

6.0

6.2

1999 2000 2001 2002

Average Screens per Indoor Theater



Source: MPAA

Theaters by Number of Screens

Theatrical

Total Number of Theaters: 6,050

Megaplex8%

Single Screen

28%

Miniplex40%

Multiplex24%

Type 2001 2002%

Change

Single Screen 2,280 1,682 -26.2%

Miniplex (2 to 7 screens) 2,901 2,457 (15.3)

Multiplex (8 to 15 screens) 1,458 1,437 (1.4)

Megaplex (16 or more screens) 431 474 10.0



* revised by Bureau of Labor Statistics(p) preliminary estimate

Employment

Source: Bureau of Labor Statistics

YearProduction & Services Theaters

Video Tape Rental Other Total Yearly 2002 vs.

2002(p) 259.2 142.0 163.6 18.1 582.9 -1.3% --2001* 264.8 137.7 163.7 16.8 583.0 (1.2) 0.0%2000* 270.1 138.6 164.7 16.9 590.3 (1.4) (1.3)1999 270.9 140.4 170.3 17.2 598.8 4.0 (2.7)1998 255.4 136.8 166.7 17.1 576.0 4.7 1.21997 237.4 133.0 160.9 19.1 550.4 4.9 5.91996 222.5 123.9 155.1 23.2 524.7 7.6 11.11995 200.7 118.7 146.1 22.1 487.6 10.5 19.51994 169.6 113.4 138.8 19.4 441.2 7.1 32.11993 152.7 110.6 132.4 16.3 412.0 2.8 41.51992 148.8 110.2 127.1 14.8 400.9 (2.4) 45.41991 153.1 112.0 131.2 14.6 410.9 0.8 41.91990 147.8 112.1 133.7 14.1 407.7 8.8 43.01989 133.9 109.9 118.2 12.7 374.7 9.9 55.61988 113.7 108.0 103.3 15.9 340.9 -- 71.0

% Change

US Motion Picture Industry Employment Areas(000s)



270270255

237223

201

265 259

139140137133124119138 142

165170167161155146164 164

50

100

150

200

250

300

1995 1996 1997 1998 1999 2000 2001 2002

Thou

sand

s

Production & Services Theaters Video Rental

Motion Picture Industry Employment Areas

Employment

Source: Bureau of Labor Statistics



Source: Nielsen Media Research

VCR Penetration in US TV Households

Home Video

Prev. Period 2002 vs.2002 106.7 97.6 1.5% - 91%2001 105.5 96.2 9.2 1.5% 91.22000 102.2 88.1 2.7 10.8 86.21999 100.8 85.8 2.0 13.8 85.11998 99.4 84.1 4.6 16.1 84.61997 98.0 80.4 2.0 21.4 82.01996 95.9 78.8 4.0 23.9 82.21995 95.4 75.8 4.1 28.8 79.51990 93.1 65.4 5.0 49.3 70.21985 86.1 23.5 56.7 315.4 27.31980 78.0 1.9 - 5,038.4 2.4

VCR Penetration Rate

(% TV HHs)

% Change VCR HHs

YearTV Households

(MM)

VCR Households

( MM)



Source: Adams Media Research

Year Prev. Year 2002 vs.2002 50.2 433.2 483.4 -24.2% -2001 71.4 566.0 637.4 (4.8) -24.2%2000 78.4 591.2 669.6 1.1 (27.8)1999 73.1 589.1 662.2 (5.7) (27.0)1998 44.5 657.8 702.3 4.0 (31.2)1997 39.9 635.5 675.4 - (28.4)

% of ChangeUnits in MM

Rental Cassettes

Sell -Through Cassettes

Total Cassettes

Sales of Home Entertainment to US Dealers

Home Video

Year Prev. Year 2002 vs.2002 69.2 633.2 702.4 84.0% -2001 37.1 344.7 381.8 102.7 84.0%2000 14.0 174.4 188.4 88.6 272.81999 8.6 91.3 99.9 191.3 603.11998 1.6 32.7 34.3 217.6 1,947.81997 0.1 10.7 10.8 - 6,403.7

% of ChangeUnits in MM

Rental DVDs

Sell -Through DVDs

Total DVDs

VHS

DVD



Source: Nielsen Media Research, Adams Media Research

DVD Penetration in US TV Households

Home Video

YearDVD

HouseholdsTV

HouseholdsPenetration

RateDVD

Households Yearly 2002 vs.2002 38.8 106.7 36.4% 38.8 56.5% -2001 24.8 105.2 23.6 24.8 90.8 56.5%2000 13.0 102.2 12.7 13.0 182.6 198.51999 4.6 100.8 4.6 4.6 283.3 743.51998 1.2 99.4 1.2 1.2 300.0 3133.31997 0.3 98.0 0.3 0.3 - 12833.3



Source: CEA, Adams Media Research, DVD Entertainment Group

1 Numbers updated per new source2 Includes Sell-Through and Rental DVD3 Titles available on DVD include movies and music videos

DVD Statistics

Home Video

1998 1999 2000 2001 2002

DVD Players Shipped to Dealers (in thousands) 1,100 4,100 8,499 12,706 17,090

Installed Consumer Base (in thousands)1 1,250 4,800 14,700 31,400 56,500

Average DVD Player Price (in USD) $390 $275 $204 $153 $140

DVD Software Units Shipped to Dealers 2 (in MM) 25.1 98.0 182.4 364.4 685.0

Titles Available on DVD 3 1,500 5,000 8,500 13,000 20,000



Source: Consumer Electronics Association

Home Video

DVD Player Shipments to Retailers

Month 2001 2002 Change

January 572,031 542,698 (5.1)

February 555,856 736,118 32.4

March 1,207,489 1,404,026 16.3

April 631,353 1,095,930 73.6

May 523,225 950,412 81.6

June 920,839 1,632,032 77.2

July 693,013 966,129 39.4

August 673,926 884,288 31.2

September 1,768,821 2,299,864 30.0

October 1,516,211 1,704,148 12.4

November 1,781,048 2,544,130 42.8

December 1,862,772 2,330,048 25.1

Total 12,706,584 17,089,823 34%



Source: DVD Report/Phillips Business Information, DVD Entertainment Group

DVD Player Sales to US ConsumersDVD Player Sales to US Consumers

Home Video

YearDVD Players

(000’s)Yearly

Change2002

VersusTitles

AvailableYearly

Change2002

Versus2002 25,100 50.3% -- 20,000 53.8% --2001 16,700 72.2 50.3% 13,000 52.9 53.8%2000 9,700 138.3 158.8 8,500 70.0 135.31999 4,070 276.9 516.7 5,000 233.3 300.01998 1,080 237.5 2,224.1 1,500 150.0 1233.31997 320 -- 7,743.8 600 -- 3233.3

DVD Titles AvailableDVD Titles Available



US Average Price per DVD Title

$20.78$20.48

$22.65

$25.54$25.31

10

15

20

25

30

1998 1999 2000 2001 2002

Source: DVD Entertainment Group

Home Video

1,500 Titles Available







US HH Growth: Internet vs. Broadband vs. DVD

(in millions)

60.166.9

54.4

45.2

31.7

11.417.6

0.6

6.21.8

24.8

13.0

4.6

38.8

1.20

10

20

30

40

50

60

70

1998 1999 2000 2001 2002

Internet HHs Broadband HHs DVD HHs

Source: e-Marketer, Nielsen Media Research, Adams Media Research

Home Video



Source: Nielsen Media Research, Census Bureau

Television Households

Television

Total Households

TV Households

2002 109.3 106.7 97.6%2001 108.2 105.5 97.52000 104.7 102.2 97.61999 103.9 100.8 97.01998 102.5 99.4 97.01997 101.0 98.0 97.01996 99.6 95.9 96.31995 98.9 95.4 96.51994 97.1 94.2 97.01993 96.4 93.1 96.61992 95.7 93.1 97.31991 94.3 92.0 97.61990 93.3 93.1 99.81985 92.8 86.1 92.8

(MM) Penetration Rate (% of Total HHs)

Year



Source: Nielsen Media Research;Consumer Electronics Association

Television

Factory Sales of Digital TV Sets and Displays

295

1,6891,835

2,2002,433

3,147

43

4,560

2,615

1,426

$0

$1,000

$2,000

$3,000

$4,000

$5,000

1998 1999 2000 2001 2002

Average Unit Price Dollars in Millions

14,000 Units

121,000 Units

648,000 Units

1.425 mil Units

2.7 mil Units



Source: PriceWaterhouseCoopers

Television Advertising Expenditures

Television

14.2

7.4

14.6

8.9

16.7

10.9

16.2

11.8

16.9

12.0

10

15

20

25

30

$ B

illio

ns

1998 1999 2000 2001 2002

Broadcast Advertising Cable Network Advertising

21.523.5

27.6 28.028.9



Source: Screen Digest

Number of Cable and Satellite Channels

Television

• 345% increase in cable and satellite channels since 1990• 18% increase in cable since 1999

Launch of Digital

Satellite

Launch of Digital Cable

6072 78

91113

130155

168

202227 235

250267

50

100

150

200

250

300

1990199119921993199419951996199719981999200020012002




* Refers to wired cable households with basic cable

Prev. Year 2002 vs.2002 106.7 72.2 -1.3% - 67.7%2001 105.5 73.2 5.3 -1.3% 69.42000 102.2 69.5 1.3 3.9 68.01999 100.8 68.6 2.2 5.3 68.11998 99.4 67.1 1.7 7.7 67.51997 98.0 66.0 3.1 9.4 67.31996 95.9 64.0 2.1 12.9 66.71995 95.4 62.7 4.9 15.2 65.71990 93.1 54.9 4.4 31.6 59.01985 86.1 39.8 6.7 81.5 46.21980 78.0 17.6 - 310.4 22.6

Year

Basic Cable Penetration Rate

(% TV HHs)% Change Basic Cable HHs

TV Households

(in MM)

Basic Cable Households

(in MM)

Basic Cable Households *

Television



Source: Nielsen Media Research, FCC

* Refers to wired cable households subscribing to premium channels. 1999 decline due in part to redefinition of some premium channels to basic cable.

Television

Prev. Period 2002 vs.2002 106.7 34.4 0.9% - 32.2%2001 105.5 34.1 1.2 0.9% 32.32000 102.2 33.7 6.3 2.1 33.01999 100.8 31.7 (18.9) 8.5 31.41998 99.4 39.1 28.6 (12.0) 39.31995 95.4 30.4 12.0 13.2 31.91990 93.1 27.0 18.4 27.4 29.01985 86.1 22.8 - 50.9 26.5

% Change Pay Cable HHs

YearTV HHs (in MM)

Pay Cable HHs (in MM)

Pay Cable Penetration Rate (% TV HHs)

Pay Cable Households *

According to the FCC, as of July, 2001, the average subscriber paid $1400/month for basic cable and $3699/month for expanded basic cable.



US Addressable Cable Households *

Source: Kagan Media Money

*Cable homes which have set-top boxes (usually for pay-per-view purposes) that can be tracked to an exact location in the home.

Television

Year Prev. Period 2002 vs.

2002 35.3 10.3% -2001 32.0 (14.7) 10.3%2000 37.5 6.5 (5.9)1999 35.2 6.0 0.31998 33.2 15.7 6.31995 28.7 30.5 23.01990 22.0 144.4 60.51985 9.0 - 292.2

% ChangeAddressable Households

(in MM)**

* *2002 figure is preliminary



Source: Kagan Media Money

Television

US Digital Cable Subscribers

1.34 3.47.63

13.85

21.1

0

5

10

15

20

25

1998 1999 2000 2001 2002*

(Mill

ions

)

1998: Digital cable launched in the US

52.3%

*Preliminary




Satellite Households

Television

Prev. Year 2002 vs.2002 17.6 36.5% -2001 12.9 34.4 36.5%2000 9.6 11.6 83.41999 8.6 3.6 104.71998 8.3 29.7 112.11997 6.4 45.5 175.11996 4.4 33.3 300.11995 3.3 - 433.5

% ChangeSatellite

Households (in MM)Year



Source: Nielsen Media Research, Kagan World Media,National Cable & Telecommunications Association, Adams Media Research

VOD

Television

Year2002 106.7 5.5 5.15% $4802001 105.5 3.0 2.84% 3292000 102.2 0.2 0.20% 271999 100.8 0.0 0.00% 0

VOD Penetration Rate (% TV HHs)

TV Households

(in MM)

VOD Households

(in MM)*

VOD/SVOD Revenue (in MM)*

* 2002 figure is preliminary

VOD = Video on Demand; An advanced pay-per-view programming service which enables viewers to order and watch movies on demand and to pause, rewind or fast-forward them.

According to Adams Media Research, the average price VOD price was $4.10.



PC Households

YearPC HHs in

MM% Change 2002 vs.

% of Total US HH's

2002* 72.7 - 66.5%2001 69.1 5.2% 66.0 2000 66.0 10.2 63.0 1999 61.1 19.0 59.0 1998 51.2 42.0 49.9 1997 44.0 65.2 43.6 1996 38.8 87.4 39.0 1995 33.6 116.4 34.0 1994 32.0 127.2 33.0 1993 28.9 151.6 30.0 1990 21.9 232.0 23.5

Technology

Source: MPAA, US Census Bureau, e-Marketer

*Preliminary



72.769.1

66.0

61.1

51.0

44.0

40.0

60.0

80.0

1997 1998 1999 2000 2001 2002*

(Mill

ions

)US PC Households

43.6%Penetration

49.9%Penetration

59.0%Penetration

63.0%Penetration

66.0%Penetration

Technology

66.5%Penetration

Source: MPAA, e-Marketer

*Preliminary



After seeing a small decline in 2001, shipments in both the US & Worldwide are expected to rise slightly in 2002 and continue the upward growth into 2003.

Worldwide 1999 2000 2001 2002* 2003eConsumer 41.4 52.4 47.2 47.6 51.0Commercial 79.2 87.5 86.9 87.9 96.0TOTAL 120.6 139.9 134.1 135.5 147.0

US 1999 2000 2001 2002* 2003eConsumer 17.7 19.3 15.5 15.7 15.9Commercial 30.9 32.7 30.5 30.6 32.3TOTAL 48.6 52.0 46.1 46.3 48.2

PC Shipments (Units in MM)

PC Shipments (Units in MM)

Source: e-Marketer, IDC

Technology

*Preliminary



Source: MPAA, US Census Bureau, e-Marketer

YearInternet HHs

(MM)% Change 2002 vs.

% of PC HHs

% of Total US HHs

2002* 66.9 - 92.0% 61.2%2001 60.1 11.3 87.0 57.42000 54.4 23.0 82.5 52.01999 45.2 48.0 74.0 43.61998 31.7 111.0 62.0 30.91997 21.8 206.9 49.5 21.61996 15.2 340.1 39.3 15.31995 9.4 611.7 28.3 9.51990 1.6 4081.3 7.3 1.7

Number of Households with Internet Access

Technology

*Preliminary



66.9

60.154.4

45.2

31.7

21.8

20.0

40.0

60.0

80.0

1997 1998 1999 2000 2001 2002*

(Mill

ions

)

21.6%Penetration

30.9%Penetration

43.6%Penetration

52.0%Penetration

57.4%Penetration

US Internet Households

Technology

61.2%Penetration

Source: MPAA, e-Marketer

*Preliminary Note: Penetration is calculated as a percentage of total US households.



0.61.9

6.2

11.2

16.8

0.0

5.0

10.0

15.0

20.0

1998 1999 2000 2001 2002*

(Mill

ions

)

0.6%Penetration

1.8%Penetration

5.9%Penetration

10.4%Penetration

Source: e-Marketer

Number of Households with Broadband Internet Access

Technology

15.4%Penetration

*Preliminary Note: Revised 2000-2001 figures reflect change in source;Penetration is calculated as a percentage of total US households.



In 2002, broadband households are projected to grow 50% as cable modem remains the preferred connection choice.

Technology

Cable Modem60.7%

Other*2.7%

DSL36.6%

2001 2002p

Source: e-Marketer

US Broadband Households by Type of Connection

* Other includes fixed wireless, satellite, and fiber

Cable Modem59.0%

Other*4.1%

DSL36.9%



Source: e-Marketer

11.2

16.8

23.3

30.5

6.2

45.2 46.1 44.7 42.141.8

0.0

10.0

20.0

30.0

40.0

50.0

2000 2001 2002* 2003e 2004e

(Mill

ions

)

Broadband Dial-up

* Other includes: fixed wireless, satellite, fiber, Ethernet and powerline technology

US Broadband Households versus Dial-up Households

Technology

*PreliminaryNote: Revised Broadband 2000-2001 figures reflect change in source.



Number of US Mobile Internet Users

Technology

Source: e-Marketer

4.0

63.5

43.0

22.5

8.9

0.0

15.0

30.0

45.0

60.0

75.0

2000 2001 2002* 2003e 2004e

(Mill

ions

)

*Preliminary



Number of US Households (2001*)

0.6

1.9

5.1

0 1 2 3 4 5 6

Television

PDA or otherhandheld

device

Cellphone orpager

(Millions)Source: US Department of Commerce, e-Marketer

In September 2001, there were 7.6 million U.S. households that contained an internet access device other than a computer.

Technology

* 2002 figures not yet available



Media Consumption

1998 1999 2000 2001 2002p 2001-2002 1998-2002Filmed EntertainmentCable & Satellite TV 667 720 774 846 851 0.59 27.59Broadcast TV 884 867 865 815 810 (0.61) (8.37)Consumer Internet 54 82 106 134 157 17.16 190.74Home Video1 36 39 46 56 77 37.50 113.89Box Office 13 13 12 13 13 0.00 0.00Interactive TV 2 0 2 2 2 2 0.00 N/ASubtotal 1,654 1,723 1,805 1,866 1,910 2.36 15.48

Other EntertainmentRadio 936 967 964 983 1,001 1.83 6.94Recorded Music 283 290 264 238 228 (4.20) (19.43)Daily Newspapers 185 183 179 177 175 (1.13) (5.41)Consumer Magazines 125 124 121 119 117 (1.68) (6.40)Consumer Books 120 121 111 109 107 (1.83) (10.83)Video Games 43 61 75 78 84 7.69 95.35Subtotal 1,692 1,746 1,714 1,704 1,712 0.47 1.18

Total 3,346 3,469 3,519 3,570 3,622 1.46 8.25

Percent Change:Media Consumption based on Hours per Person

1 Includes playback of prerecorded tapes only2 Video-on-Demand only

Source: Veronis Suhler Stevenson



Media Consumption

* Broadcast television, radio, daily newspapers, consumer magazines** Cable & satellite television, box office, home video, interactive television, recorded music, video games, consumer Internet, consumer books

2,1292,1412,130 2,094 2,103

1,216

1,328 1,3901,476 1,519

1000

1500

2000

2500

1998 1999 2000 2001 2002p

Media Supported by Advertising *Media Supported Predominately by Consumer Purchases **

Media Consumption based on Hours per Person per Year


In 2002, it’s projected that the average person will spend 58% of their time with media that is supported by advertising. Within this category, it’s expected that most people will spend more hours with broadcast television than other forms of media.

Increase due to….



Media ConsumptionConsumer Spending per Person per Year

(USD)

$53.37 $53.83 $53.39 $54.12 $54.70

$61.67 $65.13 $62.80 $60.57 $58.81

$75.10

$62.19 $69.55 $76.88$84.16$89.04 $87.34 $86.13

$87.02$92.58$97.33 $102.46

$109.60$119.23

$167.38$181.71 $194.63

$210.58$225.34

$44.07$43.57$46.45 $43.87$44.87

$62.08$50.63$41.77$27.63

$59.78$49.72

1998 1999 2000 2001 2002pConsumer Magazines Newspapers Recorded Music Consumer Internet Other* Consumer Books Home Video TV**

* Other includes: Box Office, Video Games & Interactive TV

** TV includes: Cable & Satellite TV (Basic & Premium services)




Media Consumption

$98.77$97.69$98.26$99.98$99.82

$642.38$598.51

$560.05$534.76$483.14

$0$100$200$300$400$500$600$700

1998 1999 2000 2001 2002p

Media Supported by Advertising*Media Supported Predominately by Consumer Purchases**

* Daily newspapers, consumer magazines** Cable & satellite television, box office, home video, interactive television, recorded music, video games, consumer Internet, consumer books


Consumer Spending per Person per Year (USD)

2002 mpaa market stats 60 pages

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