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Analysts Talk About Industry High Points

27 Jul, 2005 By: Erik Gruenwedel

Genres, such as TV DVD, and online rentals will combine to keep home video a robust market, said an analysts' panel yesterday.

With data showing midyear box office revenue down 5 percent, panelist Judith McCourt, associate publisher and market research director with Home Media Retailing, said the jury is out on how this year's much-maligned theatrical releases will perform at retail. She said the interlude is a great opportunity for home entertainment to focus on genres, led by TV DVD.

“An 80 percent DVD household penetration and downward pricing will lead to greater opportunities in niche genres, including children's programming, edutainment and portable fare,” McCourt said.

TV DVD product sales are expected to top $2.8 billion by the end of the year, with the children's market reaching $2.7 billion by 2007, she said.

NPD Group president Russ Crupnick said a 60 percent increase in online subscriptions, led by Blockbuster Online's aggressive marketing, has helped offset declining traditional rental. In the second quarter of 2005, Blockbuster Online increased its market share to 31 percent to Netflix's 66 percent.

Panelists agreed mass merchants are a big part of home entertainment. While 80 percent of NPD respondents chose mass merchants due to lower pricing, research found that 70 percent of them also purchased non-home entertainment product at the same time. “It's not all about driving prices down,” Crupnick said. “They are doing a pretty good job of targeting your customers.”

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