CD Software Sales More Than Triple in 1994

Sales Increase 229% to $648 Million
Bundling Accounts For a Smaller Part of Sales

April 17, 1995 (Washington, DC) --The Software Publishers Association (SPA)
reported today that sales of computer software programs on compact disk
(CD) reached $648 million in 1994, on unit sales of 22.8 million software
CDs. In the fourth quarter of 1994 (Q4 '94) alone, companies reporting in
the SPA's program had sales of $298 million on 10.2 million CDs. The
figures are from the fourth quarter 1994 report of the SPA's CD Software
Sales Program, and represent sales of 52 leading publishers of software on
CD.

Consumer-Oriented Segments Dominate Sales in 1994

Three consumer-oriented segments led sales in 1994. Sales of content
products and Games/Other Home products each accounted for about
one-quarter of CD software sales in 1994. Home education software
accounted for about one-sixth of sales in the year. With sales growth of
258% and 222%, respectively, home education and games/other home software
actually out-grew the overall average increase of 199%. Content software
(for example, encyclopedias, guide books, and reference works), while
still a substantial part of the CD software market, has been losing ground
to other categories, and grew "only" 143% in 1994.

Fourth Quarter's Distribution Mix Shows CD Owners Are Buying Software Even
After They Buy The CD Drive

The SPA's CD Program tracks CD sales in two major categories of
distribution OEM or bundled sales and non-OEM or all other channels. As
the number of CD drives installed has increased steadily, the portion of
the sales going through non-OEM channels, representing purchases by those
who already have CD drives, has steadily increased. For all of 1993,
non-OEM channels accounted for 49% of units sold and 74% of CD software
revenues. For 1994, non-OEM channels grew to account for 61% of units and
89% of revenues.

"It isn't that OEM channels are not growing," said SPA Research Director
David Tremblay. "OEM channel revenues grew 37% in 1994, but non-OEM
channel sales grew 296%. For CD software publishers, OEM sales represent
an important part of the business. But, as the number of installed CD
drives increases, retail, direct and other channels will become an
increasingly important part of the distribution mix."

Information for the fourth quarter report is based on the aggregate sales
information of 52 participating companies, including Br0derbund, Comptons
New Media, Knowledge Adventure, Microsoft, MindScape and World Library.
The companies provide sales information to the Chicago accounting firm
Ernst & Young, which prepares the report for the SPA. Figures reported in
this release represent aggregate sales of participating companies and
should not be taken as total sales of the whole CD software industry.

The Software Publishers Association is the principal trade association of
the PC software industry. Its 1,160 members represent the leading
publishers in the business, consumer, and education markets. The SPA has
offices in Washington, DC, and Paris, France. SPA press releases are
available on-line on the SPA Worldwide Web site (www.spa.org), through
CompuServe (GO:SPAFORUM), and from SPA's faxback service at 800-637-6823.

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756

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