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DVD Accounts for Nearly Two-Thirds of Sales in First Quarter

2 May, 2002 By: Judith McCourt

DVD sales exploded in the first quarter as new DVD households shored up their collections. Sales of the format accounted for more than 60 percent of overall unit sales in the first 13 weeks of 2002, according to VideoScan data.

It was a radical change from the first three months of 2001, when cassette sales outpaced DVD sales by almost 2 to 1.

DVD household penetration reached 32 percent by the end of the first quarter, according to a study of 500 U.S. households conducted by Video Store Magazine.

Meanwhile, despite a heavy slate of family fare – the traditional bastion of VHS – cassette sales tumbled as households shifted to purchasing the new format.

Still, VHS sales dominated in certain genres. Sales of nontheatrical children's' titles, such as Hit Entertainment's Bob the Builder and Paramount Home Entertainment's Dora Saves the Prince, remain heavily weighted to the cassette format. In the first quarter, 83 percent of sales in this genre were rung up as cassettes. Fitness and special interest genres also remained VHS strongholds, with 88.4 percent and 58.2 percent, respectively, of sales in those genres on VHS.

Universal Studios Home Video's The Fast and the Furious was the undisputed bestseller of the quarter, outselling its next closest competitor, Buena Vista Home Entertainment's Cinderella II: Dreams Come True, by a margin of 1.4 to 1. The Fast and the Furious, released only on DVD at a sellthrough price, profited from a Jan. 2 release date, which gave it the full quarter to reap sales. Cinderella II, released in both formats at a sellthrough price in late February, quickly closed the gap on The Fast and the Furious. By quarter's end Cinderella II was the No. 1 bestseller in cassette sales and the No. 5 seller on DVD.

Warner Home Video grabbed 18 percent of combined unit sales in the quarter to take the top market-share spot, narrowly beating out Buena Vista Home Entertainment with 17.6 percent of the unit sales tally. Warner led the way in DVD unit sales, with 19.6 percent of all units sold in the format. On the VHS side, Warner landed in the No. 2 spot, with 15.5 percent of unit sales.

Warner's top performer in the 13-week stretch was Training Day, released in the last two weeks of the quarter and featuring Academy Award winner Denzel Washington. The title grabbed the No. 4 spot in overall sales for the period with a third-place finish on the DVD side and a No. 10 spot on VHS.

Buena Vista was unchallenged in cassette sales, with a massive 23.9 percent slice of the quarterly VHS pie. The Mouse House also fared well in DVD sales, with a 13.6 percent share of the pie.

Although Disney lost the quarterly combined unit sales race to Warner, the supplier's higher-pricing strategy gave it the top berth in the revenue contest. According to ACNeilsen data, the average DVD sold for slightly more than $16.50 with the average VHS at $11.05. Buena Vista's DVD retail prices average nearly $20, while Warner's come in at a little more than $15 per disc. On VHS, Buena Vista's product averages close to $15, while Warner's product averages $11.

Comedies were the bestsellers in the first quarter, with 20.6 percent of combined unit sales with the unrated version. That version of Universal's American Pie 2 was the best performer of the lot, placing No. 2 in DVD sales for the period and No. 5 overall. The rated version was also among the Top 25 DVD sellers, landing at No. 15.

Action/adventure titles, led by The Fast and the Furious, placed just behind comedies, with 19.7 percent of the unit sales for the quarter. Dramas finished No. 3 with 16.3 percent. Buena Vista's Pearl Harbor turned in the genre's best performance, a late-fourth-quarter 2001 offering with strong sales legs that finished in the top 10 in both DVD and VHS sales.

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