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Annual Sellthrough on Record Pace With July Sales Spike

1 Sep, 2003 By: Judith McCourt

July video sales support a record year in the making for the video industry. Consumers continue to spend an unprecedented amount on DVD, with video sales for the month registering $952 million -- a 20 percent hike from July 2002.

Video spending for the year is on track to hit $14 billion, as the hard-hitting fourth–quarter releases are in the wings ready to further pump video sales.

According to Nielsen VideoScan, 82 percent of the units purchased in July were in the DVD format, compared with 64 percent a year ago. Video Store Magazine market research estimates that, thanks to the premium price that DVD commands, 86 percent of the revenue generated at retail for the month came from discs.

Consumers bought 42 percent more discs in July 2003 than they did in July 2002. The uptick in unit volume translated into an even bigger payoff at the cash register. Sales for DVD in July hit $818 million, a 44 percent increase from the comparable five-week sales period in 2002.

DVD sales year-to-date stand at $5.81 billion, compared with $3.85 billion at the same point last year.

Cassette Sales Plummet
Statistics from the Consumer Electronics Association showed that sales of software plummeted and that unit sales to dealers of VCR decks was down 78.4 percent for July 2003, compared with July of the previous year.

VHS sales recorded a steep decline for the month, with unit volume dropping 47 percent compared with the same five weeks in 2002. Cassettes account for just 18 percent of all videos purchased at retail. Year-to-date unit volumes are off 41 percent. Cassette sales for the month were $133.8 million, down 40 percent from the $223.4 million spent in July 2002.

So far this year, consumers have spent $1.1 billion buying cassettes, compared with $1.8 billion at the end of July 2002.

Female Demographic Still Buys Cassettes
Paramount Home Entertainment's How to Lose a Guy in 10 Days, released July 1, was the top-selling release of the month. Video Store Magazine market research estimates sales of the romantic comedy hit 2.3 million units. With 17 percent of the sales still coming from VHS, this underscores continued support for the format, particularly from women who have been slower to embrace DVD.

By contrast, BV/Miramax's Gangs of New York -- an action-packed drama with a stronger appeal to males -- also released July 1 sold just 9 percent of its units in the cassette format. The Miramax title was the No.2 overall seller in July, with Video Store Magazine market research pegging its sales at 1.85 million units.

Supplier Share Sweeps Favor Warner
Warner Home Video, which includes New Line, HBO and PBS, took the market sweeps for the month. The supplier's unit volume accounted for 17.9 percent of the units sold in July, which translated into 18.9 percent of revenue generated at retail. Video Store Magazine market research places Warner's share at $180 million of the $952 million video pie. The top performer at retail for WHV in July was New Line Home Entertainment's Final Destination 2, which finished No. 6 in DVD sales for the month. On VHS, Kangaroo Jack claimed the No. 2 spot.

Buena Vista Home Entertainment, which includes Disney, Miramax, Dimension and Touchstone, placed a strong second in July, grabbing 15.9 percent of the units sold. Buena Vista titles claimed an estimated $160 million at retail in July, and the supplier had two of the top 10 DVD sellers, with Shanghai Knights (No.4) joining No.2 performer Gangs of New York. In cassette sales, the studio owned three of the top five spots, with Piglet's Big Movie (No. 3) and Jungle Book 2 (No. 4) joining Gangs of New York (No. 5).

Children's nontheatrical and fitness genres continue to lag in the DVD format. According to Nielsen VideoScan, in July DVD sales made up 46 percent of the units sold in the children's nontheatrical genre. Fitness continues to trail the pack, with just 32 percent of its sales coming from discs.

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