DEG: DVD Shipments Up in Q1 Despite Consumer Spending Drop26 Apr, 2007 By: Thomas K. Arnold
A weak slate of theatricals may have kept consumer DVD spending down in the first quarter, but software shipments and hardware sales both achieved record highs, according to DEG: The Digital Entertainment Group.
Suppliers shipped 414 million DVDs into the market during the first three months of this year, up nearly 5% from the first quarter of 2006, according to figures compiled by Kaplan and Associates on behalf of the DEG.
During the same period, consumers bought more than 8 million DVD players, beating by 3% the previous record, set in the first quarter of 2006, according to data from the Consumer Electronics Association, retailers and manufacturers.
Since the DVD format's launch 10 years ago last month, consumers have bought more than 203 million DVD players. The DEG estimates that of the 90 million DVD households, 56% own more than one player.
On the software side, more than 7.6 billion DVD units have been shipped into the marketplace since the format's March 1997 launch, the DEG reports.
DVD sales to consumers in the first quarter slipped 8% from the first quarter of last year, according to Nielsen VideoScan data. Observers attribute the decline to the fact that studios last year pumped most of their hot theatricals out in the fourth quarter, leaving a meager assortment of titles for January, which in recent years has become such a strong video month that it became known as the “fifth quarter.”
The January 2007 theatrical slate grossed a combined $533.5 million at the box office, 28.1% less than the January 2006 slate. Stronger releases began to show up in February and March, but overall the theatrical value of first-quarter 2007 DVD releases, $2.7 billion, is still down 11.2% from the first-quarter 2006 roster.
The January “fifth quarter” phenomenon developed during DVD's boom years. Each year, studio marketers would target the millions of new DVD households that had come online during the previous holiday season with a rich slate of high-powered theatricals. But now that the market has matured and most U.S. households already have at least one DVD player, studios are more inclined to push out their big titles before Christmas.
Studio executives remain optimistic about the remainder of the year, noting that the fourth quarter, in particular, will likely be stacked with hot summer-theatrical movies.