April Showers Dampen Video Sales19 May, 2005 By: Judith McCourt
After a robust first quarter in which consumers spent a record $4.3 billion on DVDs and videocassettes, April brought a softening of the market. Consumer spending came in at an estimated $959.2 million, down 7 percent from the $1.03 billion consumers spent in the comparable four-week period in 2004.
DVD sales were off 1.7 percent, coming in at $934.8 million, but VHS sales plummeted nearly 70 percent — around the same time Target Stores announced its intent to get out of the VHS business later this year.
The collective box office clout of April 2005 releases was off just 1.5 percent from the April 2004 slate, while six films had grossed more than $25 million in theaters, compared to eight last April.
But consumer demand was softer, except at the very top. Universal Studios Home Entertainment's Meet the Fockers sold more than 6 million units, according to Home Media Research, performing on a par with April 2004's big seller, Warner Home Video's Matrix Revolutions. Overall, however, unit sales of the top 50 adjusted for a four-week period were off 28 percent compared to April 2004, according to Nielsen VideoScan data. The No. 2 seller, Warner's Ocean's Twelve, sold about half as many copies as April 2004's second-place finisher, Kill Bill Vol. 1, from Buena Vista Home Entertainment.
While studios have shortened theatrical-to-video windows in the hopes of drafting off a film's theatrical momentum, the strategy didn't work this time around — again, except at the very top. The April 2005 crop of releases hit video an average of 138 days after bowing in theaters; in April 2004, the average window was 164 days. Meet the Fockers came to video just 118 days after it opened theatrically, compared to 153 days for April 2004's top seller, Matrix Revolutions. For Ocean's Twelve, the window was 123 days, compared to 186 days for Kill Bill Vol. 1.
If box office is essentially flat and release windows are shorter, why are sales down? Previously viewed product could be the spoiler. The ready availability of used product — sometimes as soon as one week after release — is an affordable option for some buyers.
In 2004, consumers spent more than $2 billion buying previously viewed DVDs. The hottest new releases often have more than 1 million units in the rental pipeline, and with rental patterns now mirroring theatrical — a big opening, followed by a sharp falloff — consumers can buy used product earlier than ever. For the week ended May 15, Hollywood Entertainment Corp.'s top-selling previously viewed titles included Elektra, Ocean's Twelve and Sideways — all April releases.
In the new-release sellthrough sweepstakes for April, Warner came out on top with an 18.7 percent market share, according to Nielsen VideoScan data. Powered by the month's top seller, Meet the Fockers, Universal came in at No. 2, generating 14.2 percent of April unit sales.