CD Software Sales Explode in Fourth Quarter
"Yes, Virginia, It Really Was a Multi-media Christmas"
More Than Half of all Sales for Year in 4Q

March 29, 1994 (Washington, DC)--The Software Publishers Association (SPA)
reported today that sales of computer software programs on compact disk
(CD) reached $102 million in the fourth quarter of 1993, on unit sales of
just over 4 million software CDs The figures are from the fourth quarter
report of the SPA's CD Software Sales Program, and represent sales of 62
leading publishers of software on CD. For all of 1993, software publishers
participating in the SPA's CD Software Sales Program reported total sales
of $202 million on 8 million CDs sold.

For the year, fifty-two percent of the CDs reached the user from the
original equipment manufacturer (OEM), while The remainder were
distributed through other channels. However, because of higher unit
prices, revenues were split 75% to 25% in favor of non-OEM channels l he
study showed an average price of $39.30 per CD for sales through non-OEM
channels, and an average of $12.20 for OEM-direct purchases.

By all measures, Q4 '93 was a block-buster. Sales in Q4 '93 equaled total
sales for the prior three quarters of 1993. Non-OEM channels alone
accounted for $80 million sales in the final quarter of the year. For both
Q3 and Q4, 1993, unit sales volume for non-OEM channels exceeded OEM
volume, showing the growing acceptance of CD software.

Content-based CDs such as encyclopedias, dictionaries and other reference
works were the largest selling category, accounting for 31% of sales in
the fourth quarter and 40% of sales for the full year. Games and other
home software made up 30% of sales in the year and 33% in the final
quarter. Home education software was the only other type of software to
account for more than 10% of sales. Home education software made up 24% of
sales for the full year, and 28% in the fourth quarter of 1993.

CDs 'Lift Of' in 3Q

"The third quarter of 1993 will likely be remembered as the 'lift off'
point for CD software sales," said David Tremblay, SPA research director
"For the first time, non-OEM unit sales exceeded OEM unit sales. In other
words, consumers started going out and buying individual CD titles, rather
than just requiring them as part of a package bundled with their new
computer or add-on multimedia kit That trend continued through the fourth
quarter holiday season, when 52% of units and nearly 4-in-5 dollars were
from stand-alone sales."

Information for the fourth quarter report is based on the aggregate sales
information of 62 participating companies, including Br0derbund, Comptons
New Media, Knowledge Adventure, Microsoft, The Software Toolworks and
World Library. The companies provide sales information to the Chicago
accounting firm Ernst & Young, which prepares the report for the SPA

The Software Publishers Association is the principal trade association of
the PC software industry. Its 1,100 members represent the Leading
publishers in the business, consumer, and education markets Since 1988,
the SPA's ongoing reports on the PC computing software markets have
provided the most reliable and authoritative sales, management and trends
data in the industry the SPA has offices in Washington, DC, and Paris,
France

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

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