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Buena Vista Closes In on Warner in Sales Market Share Race

23 Dec, 2003 By: Judith McCourt

Buena Vista Home Entertainment is closing in on Warner Home Video as the 2003 sellthrough market share race enters the final leg.

Video Store Magazine market research shows that Warner held the lead at the end of November with about $200 million separating the top two contenders on $11.54 billion of consumer sellthrough spending.

The two suppliers chose distinctly different fourth-quarter strategies, with Warner releasing most of its hits early and Buena Vista saving some of its biggest releases for November and December.

The strategy paid off for Buena Vista in November. The supplier grabbed a whopping 29.9 percent of all unit sales in November, according to Nielsen VideoScan data. Finding Nemo was the second (after The Lion King) of Buena Vista's fourth-quarter “fab five” to hit the shelves.

Nemo, the No. 1 theatrical release of the year ($339.7 million), which debuted on video Nov. 4, did even better on video. By the end of November, Nemo had pulled in an estimated $355.9 million in video sales, making more in its first month than it made during its entire theatrical run. Video Store Magazine estimates the fish tale sold more than 20 million units in November, skewing heavily toward DVD, with 15.6 million units of the total volume coming from disc. By year end, the title is projected to sell 25.24 million copies — of which 19.54 million will be DVDs — and gross an estimated $431 million on video.

The Santa Clause 2, the third of Disney's “fab five,” which streeted Nov. 18, was the overall No. 2 seller for the month, with 3.95 million units in its initial two weeks of release, generating an estimated $72.6 million at retail.

The Lion King, released in October, had sold 8.63 million units, with an estimated retail value of $153 million as of Nov. 30.

Buena Vista will finish 2004 with a bang with December releases Pirates of the Caribbean: The Curse of the Black Pearl and Freaky Friday. Video Store Magazine forecasts that Buena Vista will lead in December and challenge Warner for the 2003 top spot. Based on early sales estimates, Video Store Magazine pegs Pirates' sales at almost 16 million units and Freaky Friday at upwards of 4 million units.

Adding muscle to Buena Vista's challenge is pricing. While both suppliers generate more than $17 for a disc at retail, Buena Vista commands a premium price in the eroding VHS market. Its average cassette sells for more than $14, according to AC Nielsen data, compared to just under $11 for Warner product.

Warner finished a distant second in November, with 18.4 percent of the unit sales, according to Nielsen VideoScan data. New Line Home Entertainment's The Lord of the Rings: The Two Towers (distributed by Warner) continues to do well. Video Store Magazine estimates the extended version, released Nov. 18, has sold 2.8 million copies. Two Towers' sales (combined sales of all versions) for the year are expected to exceed 17 million units, making it the overall No. 2 seller of 2003.

November sales rang in at $1.53 billion, 29 percent more than consumers spent in November 2002. DVD sales were 53 percent higher than sales in November 2002, while cassette sales were off 43 percent.

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