The market suffers from its enormous success. As an entire industry, home video is beyond mature. Virtually every home desirous of a television or playback device owns one, and most own multiple televisions or playback devices. With an average of 2.5 televisions per household, the television surpasses stoves and refrigerators in its ubiquity.

Industry growth is accomplished through upgrades propelled by constant advances in technology and stylization that create new product groups. Presently, the industry has set forth the most desirable product in the history of the industry high-resolution, small-footprint, widescreen flat-panel televisions. Unfortunately, these products retail at a substantially higher price than most consumers are accustomed to paying for television sets. As a result, industry sales during the review period were largely dependent on whether consumers were sufficiently hopeful about the future to place thousands of dollars of home video product on credit.

Looking ahead, as prices drop, desirable new product should result in multiple sequential years of industry growth. Because this expected growth is so readily apparent, however, the industry is saturated with new entrants in addition to a large number of market leaders in a fragmented market. Virtually all players are mining the same product categories-flat-panel TVs, and combination DVD-R/DVRs and DVD-recorders/VCRs. Unless manufacturers develop distinct approaches to the market, the future for many will be bright, digital, and flat, but sufficiently competitive to drive profit margins down.