That means the battle over next-generation DVD formats won't slow sales, the market researcher said.
The HD DVD format, high-definition discs that hold up to 30GB of data and are backward-compatible with current DVDs, will lead in the near future, but Blu-Ray products will start gaining in 2006, spreading from Asia to Europe and the rest of the world in 2007, the market researcher said.
Blu-Ray discs can store large amounts of data, up to 50GB, compared to current DVDs, which can store up to 9GB for dual-sided discs, roughly 4.5GB per side.
In North America, consumers will start replacing their libraries of old VHS tapes and DVDs with high-definition versions of entertainment content, fueling HD DVD growth. Elsewhere, Blu-Ray discs will become the dominant high-definition format due to backing by leading gear makers, In-Stat said.
"High-definition DVDs will appear later this year to take advantage of the growing installed base of HDTV sets in the U.S.," Gerry Kaufhold, an analyst at In-Stat, said in a statement. "Music videos, DualDisc products and locally produced DVDs will account for 20 percent of the market value by 2009."
In-Stat said point-of-sale offerings such as those by Rimage will facilitate "burning" DVD discs from kiosks, making it possible for book stores, airport shops and other retailers to sell DVDs without keeping inventories.