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Alexander & Associates Survey: Fourth Quarter Banner Finish for Home Video Industry

16 Aug, 2001 By: Hive News


Consumers will spend heavily on packaged goods home entertainment product this season, according to a new survey of consumer purchase intent released by Alexander & Associates on Thursday.

Conducted during the first week of August, eight weeks before the holiday selling season begins in earnest, the survey reported that consumers across the countrystated their combined intentions to buy a total of 197 million units ofprerecorded home entertainment.

DVD will account for a record-breaking 36% of this total, with indications that total DVD units will reach nearly 71 million units, upmore than 140% over fourth quarter 2000’s 29.6 million units.

Commented Greg Durkin, g.m. of the Video Flash program for Alexander & Associates: "We are looking at all purchases: new and previously viewed -- on all formats: DVD and VHS -- through all outlets: brick and mortar, direct response and on-line -- by allcustomers: even those that do not have players themselves but buy as gifts," Durkin said.

The value of this broad market will exceed $3.0 billion in the final 13 weeks of this year, according to the survey. This represents a gain of about 20% from thesame quarter last year.

"The growth in this market is fueled by the growth in DVD sales," Durkin added. Even though total sales of VHSunits through all channels is still very high, they have been declining in unit count and average price. As a result, the main driver is thegrowth in full-price DVD units, Durkin said.

"In fact, DVD is so popular that some titles and some stores are going to see DVD and VHS sales at a parityfor the first time," he said.Durkin urged that retailers not neglect their VHS inventories, however.

With significant uncertainty about the strength of the overall consumer economy, Durkin pointed out that entertainment products in this general price range should be preferred by consumers. "But if there is any belt-tightening by consumers, VHS product may show even more strengththan we expect in this fourth quarter," he commented.


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