Discs Make Up 80 Percent of May Consumer Sales26 Jun, 2003 By: Judith McCourt
Halfway through 2003, DVD set-top players have reached the 50 million-household-penetration mark, and consumer buy rates reflect the format's unprecedented acceptance as a consumer home entertainment staple.
In May, 80 percent of unit purchases were discs, up from 64 percent in May 2002, according to Nielsen VideoScan data.
Although consumers are gobbling up DVDs, total combined DVD and VHS unit sales in May dipped 2.6 percent from the same five-week period last year, according to VideoScan data. DVD unit sales posted a healthy 22 percent jump, but that was not enough to offset the 46 percent decline in cassette sales compared to May 2002.
Still, Video Store Magazine market research projects that revenue for the month was on a par with last year, thanks to the shift to the higher-priced format. For the first quarter of 2003, the average price of a DVD was $17.34, compared to $11.30 for a cassette, according to Nielsen data.
Family and children's product continues to gain ground on DVD. In May 2002, 53 percent of sales for family releases and 22 percent of sales for children's nontheatrical releases were on DVD. This year, those numbers bump up to 68 percent of family title sales and 46 percent of children's nontheatrical sales on DVD.
Two of the top five best-selling titles for May were family titles. Buena Vista Home Entertainment's Treasure Planet claimed the top spot for the month. The animated adventure squeaked out a win over DreamWorks Home Entertainment's Catch Me If You Can, which was released May 6 to sellthrough on DVD, forcing VHS-only households to the rental counter.
Treasure Planet, released April 29 -- therefore benefiting from availability over the entire five-week reporting period -- sold 68 percent of its units in the disc format.
Harry Potter and the Chamber of Secrets also found a place in the top five sellers. Debuting April 11, the fantasy finished No. 4 at the sales counter in May. Chamber got a boost from consumer frenzy surrounding the June 21 release of the fifth book in the series, Harry Potter and the Order of the Phoenix.
The popularity of family-based titles will continue through 2003 as DVD-enabled units permeate the hardware landscape. DVD has transcended the boundary of the home. Since DVD drives are routinely included in personal computers, they have become a staple of most college dorm rooms. What's more, DVD playback devices are an integral component of most game consoles. With these options included in the mix, Video Store Magazine estimates almost 100 million DVD playback devices are embedded in the domestic market.
One of the critical factors behind DVD's success is that its popularity extends beyond the latest big theatrical hit. Consumers are finding plenty of reasons to include DVD classics in their collection. The Matrix, released Sept. 21, 1999, earned the No. 5 overall seller spot in May, with sales outpacing many of the latest theatrical releases. Like the “Potter” phenomenon, sales were boosted by the franchise's second entry, The Matrix Reloaded, which grossed $264.4 million in theaters as of June 22. VSM pegs the aggregate unit sales of The Matrix at 8.5 million units, making it the No. 9 overall best DVD seller since the format's introduction.
Warner Home Video, which includes, New Line, HBO and PBS titles, continues to outpace sellthrough competitors. The supplier attracted 21.8 percent of May's overall unit sales, according to VideoScan data. Warner finished first over Buena Vista Home Entertainment, which garnered 17.9 percent of unit sales for the month.
Both Warner and Buena Vista have been supporters of day-and-date releases at sellthrough for both DVD and VHS. The composition of unit sales for both suppliers hovers at an 80:20 disc-to-cassette ratio, marking a recognition from both suppliers that VHS-only households still want to purchase the latest releases. Incremental sales from VHS households has held Warner and Buena Vista at No. 1 and No. 2, respectively, in the monthly market-share sweeps for the past two months.
Sales of comedies in May outpaced all other genres for the month by a margin of almost 2-to-1.
Genre unit sales indicate that consumers prefer to purchase discs to prerecorded cassettes. For sci-fi, documentaries and foreign titles, DVD unit sales comprise more than 90 percent of total sales.