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Discounters Claim 36% of DVD Market

13 Jul, 2001 By: Jessica Wolf

Discount mass merchants have taken their biggest bite yet out of DVD sales, chomping into the DVD share of mass retailers like Best Buy andCircuit City this year.

According to VideoScan data through the end of June, DVD sales in this channel are more than 300% higher than at the same time last year. Discount mass merchants make up nearly 36% of total DVDsales so far this year, up more than 10% from the same period of 2000.

Stores in this category reporting to VideoScan and A.C. Nielsen includeWal-Mart, Target and Kmart among other smaller discounters.

One look at the media sections of these stores shows the increasing real estate commitment discount mass merchants are making to DVD.

Wal-Mart is even airing a television ad campaign featuring peppy employees touting DVD.

Wal-Mart also chose a video software supplier, Columbia TriStar Home Entertainment, as its electronics supplier of the year.

With more DVD software than ever before hitting the market and increasing hardware saturation due to low prices, DVD sales took off in every other sales category as well.

The “other mass merchants” channel, which includes Best Buy and Circuit City, is up more than 260% from last year, but lost a share of the DVD pie so far this year with 39% of overall DVD sales, down from 45% last year. DVD sales in the specialty retail sector grew by 142% from the same time last year. DVD sales in grocery stores are up nearly 500% compared to mid-year 2000.

Though overall VHS unit sales are up slightly from last year, VHS sales dropped in every channel except Internet/mail order and discount mass merchants. VHS sales for discounters are up 10% from the sametime last year.

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