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DVD Still Rings Up Sales for Music Biz, But 2004 Struck a Few Sour Notes

7 Jan, 2005 By: Jessica Wolf

It was the best of times and the not-so-best of times in 2004 for music DVD.

On one hand, music DVD releases continued to increase, while retailers of all stripes got behind the genre in a big way. Suppliers pumped nearly 19 percent more music DVD titles into the market than in 2003, according to The DVD Release Report. Video Store Magazine Market Research estimates consumer spending on music DVD for the year will land at $500 million — up $100 million from spending in 2003. And as of Dec. 26, sales of music DVD product were already up more than 25 percent from 2003's year-end total according to Billboard/SoundScan data.

On the flipside, the record labels' anticipated release of the DVD/CD hybrid DualDisc rolled out slowly met with consumer warnings from hardware manufacturers. And sales of hi-resolution discs — though suppliers continued to release new DVD-Audio and SuperAudio CD titles — barely made a plink in music DVD coffers last year.

On the Plus Side
Music documentaries made a splash last year, with First Look Media's Mayor of the Sunset Strip and Palm Pictures' DiG! and Tom Dowd and the Language of Music garnering critical acclaim in short theatrical runs (DiG! will hit DVD this year while Dowd is up for best long form music video Grammy in February). New Line Home Entertainment entered the music DVD market with a ThinkFilm music doc featuring long-lost footage of The Grateful Dead and Janis Joplin in Festival Express.

Warner Music Group's Concert For George, released in 2003, showed strong sales legs well into 2004 and the label's release of the four-disc LiveAid on DVD hit the market with a bang in the fourth quarter, outperforming sales expectations, said Paul DeGooyer, VP of Warner Strategic Marketing.

The hottest CD releases of the day also peppered Billboard SoundScan's top 10 music DVD releases last year, in part thanks to the fact that the music DVD release is packaged with a CD element as a bonus feature. Many of the year's top music DVD sellers, such as Wind-Up Records' Creed: Greatest Hits, Interscope Records' How to Dismantle an Atomic Bomb from U2 and Tee Vee Tunes' Lil' Jon and the East Side Boyz Part II arrived in that configuration.

The DVD-as-CD-bonus-feature philosophy is still under debate, as some suppliers feel it can devalue the DVD product, though the hope has traditionally been that the bonus element will help deter illegal downloading.

Increased Visibility
Theater chain Regal Cinemas, through its digital delivery arm, Regal CineMedia, began hosting one-night theatrical premieres of concert DVDs at select theaters for artists such as Linkin Park, Dave Gahan, Sheryl Crow, Coldplay, Beyonc?, KISS, Kenny Chesney and The Who.

Timed to DVD release dates, record labels noted a first-week sales impact thanks to these select screenings, said Dan Diamond, VP of business development for Regal Entertainment Group.

Meanwhile, traditional music retailers, like Amoeba Records, Newbury Comics and Tower Records — who have come to rely on DVDs as much as CDs for business over the last few years — cited an increasingly strong music DVD performance at retail. Bookstore chains like Borders and Barnes & Noble, stepped up their shelf-space and merchandising commitments to the genre last year and trendy music DVD titles began cropping up as regular stock at tastemaker accounts such as clothing retailer Urban Outfitters.

Competition and Confusion
Once again, to the dismay of competing music and video retailers, electronics behemoth Best Buy entered the holiday shopping season with an exclusive music DVD product on its store shelves. This time, it was Dream Ticket, a four-disc DVD set from Elton John, priced attractively at $29.99.

Exclusives like this, especially when they happen often, create a negative consumer impression of indies or chains without the release, said Todd Zaganiacz, president of the National Entertainment Buying Group. That's not good for the general health of the industry, but unfortunately there's probably no end to it in sight, he added.

Meanwhile, at August's National Association of Recording Merchandisers Conference in San Diego, the record labels staged an elaborate demonstration of DualDisc — a new product with CD content on one side and DVD on the other.

Retailers on hand to test DualDisc were excited for its impending release, but the labels followed up with only a trickle of releases, highlights of which included Warner Music Group's The Donnas Gold Medal and Simple Plan Not Getting Any. Unfortunately, The Donnas' DualDisc shipped with a replication glitch on the CD side and Warner offered trade-in's for the CD-only version. Shortly after news of that broke, several hardware manufacturers, including Sony and Pioneer, issued warnings to consumers not to play DualDisc in their products for fear the non-standard CD side would cause equipment failure.

This, though the consortium of record labels backing the product ran it through extensive hardware testing before its release to market, said John Trickett, CEO for 5.1 Entertainment, which released more than 50 DualDisc titles from a variety of high-profile catalog artists last year.

Still the labels do plan a larger push both in marketing and release slate for DualDisc in 2005, Trickett said.

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