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February Sales Flat Compared to Last Year's Tally

25 Mar, 2004 By: Judith McCourt

Is the party over? With the penetration of DVD players slowing, disc prices declining and VHS sales waning, Video Store Magazine Market Research indicates that overall February sales were flat compared to February last year. Year-to-date sales are running just 4.2 percent ahead of 2003 tallies.

Overall unit sales, according to Video Store Magazine estimates for February, registered $1.07 billion -- on a par with February 2003. DVD sales accounted for 90 percent of the tally, coming in at $956.5 million for the month, 5.4 percent ahead of the same month last year.

Cassette sales continued to slide, falling 37 percent, to $111.8 million, in February.

A look at Nielsen VideoScan's top 100 sellers through Feb. 22 indicated that the sales for the top 100 VHS and DVD sellers combined was just 0.6 percent ahead of the same period in 2003. While DVD unit sales for the top 100 sellers are trending at 14.7 percent above the same period in 2003, the dramatic decline in VHS sales is taking its toll. Cassette sales for the top 100 sellers, according to Nielsen VideoScan data, which does not include Wal-Mart, were off 55.3 percent through Feb. 22.

The declining average price of cassettes and discs, which is in part due to the increasing availability of catalog product, compounds the effect. According to Video Store Magazine estimates, the average price of a DVD in the first quarter of 2003 was $17.36, compared with $15.63 in first-quarter 2004. The average price of a cassette also dropped from $10.40 to $9.56.

While cassette sales for February 2004 are down compared with the same month in 2003, VHS units sold to consumers, as a percentage of the whole, have held steady for the past two months. Cassette sales have made up about 15 percent of the pie, accounting for less than 10 percent of the revenue total for the past two months, suggesting there's a residual group of VHS player owners that are reluctant to climb on the DVD train. By comparison, in February 2003, VHS sales accounted for 25 percent of the overall unit volume and 16 percent of the revenue take.

Through February, Video Store Magazine estimates that aggregate DVD and VHS sales were $2.44 billion, up 4.2 percent from the $2.34 billion spent last year.

Buena Vista Home Entertainment grabbed the market share sweeps for the month with an adjusted market share of 23.4 percent in February. Eighty-one percent of its volume came from DVD. The supplier grabbed the top spot in both DVD and VHS sales, thanks to The Lion King 1-1/2, which ranks as 2004's top seller in both formats.

The Lion King 1-1/2, released Feb. 10, sold through 6 million units in February, according to Video Store Magazine estimates. The Lion King spinoff, featuring the antics of Pumbaa and Timon, brought in an estimated $126 million at retail. Of the 6 million units sold, 15 percent of the sales were cassettes, underscoring children's nontheatrical titles as one of the continued sweet spots in cassette sales. According to VideoScan reports, 31 percent of all children's nontheatrical titles were still being purchased in the VHS format in February.

Buena Vista titles claimed four of the top five spots in cassette sales and two of the top five DVD spots, through the end of February. Also performing well for the supplier was Open Range, starring Kevin Costner and Robert Duvall, which was released Jan. 20.

Warner Home Video was the No. 2 finisher in February, claiming 15.6 percent of the overall market share. The supplier placed second in both DVD and VHS sales for the month, with 82 percent of its overall sales coming from discs. The best performer for the studio in February was another Robert Duvall starrer, Secondhand Lions, which was released Feb. 3 under the New Line label.

In the February genre sweeps, comedy was king, accounting for 26.8 percent of all unit sales according to Nielsen VideoScan reports. Of all comedies sold, 95 percent were in the DVD format.

In February, all genre sales were predominantly in the DVD format. Fitness, the last to past the halfway mark, pulled 52 percent of its sales from discs.

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