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Growth of Sellthrough Big Topic at Ingram Dealer Show

29 Oct, 2004 By: Erik Gruenwedel

Video sellthrough this year is projected to top $15.9 billion ($14.7 billion in DVD) — up almost 19 percent from 2003.That's according to Warner Home Video (WHV) data released to retailers attending last week's Ingram Entertainment 19th annual Dealer Show in Long Beach, Calif.

Spurred by a 20.9 percent year-to-date increase in new-release DVD sales as well as recent-release DVD sales, and a 24.7 percent increase in catalog sales, total DVD unit sales are expected to reach nearly 1 billion units (952 million units) in 2004.

With VHS sales added in, total consumer unit purchases will be up more than 20 percent from last year, according to the WHV data.

WHV reported new DVD unit prices have increased 2.2 percent — largely due to TV DVD boxed sets — yet catalog unit prices have fallen 3.3 percent despite the influx of TV DVD product.

“Without a doubt, most of the growth is through sellthrough,” said Gene Zimmerman, regional VP with Ingram. “We're seeing a lot of budget product.”

Specifically, Zimmerman said, previously viewed titles (PVT) are giving indie rentailers a means to stay competitive with the mass retailers.

Jim Russo, sales and marketing manager with Razor Digital Entertainment, Beverly Hills, Calif., agreed, saying the studios dictate prices on new releases and, as a result, the rest of the industry has been thrown into a “low-priced ball game.”

“PVT is part of what we do,” said Russo. “Rental created that market, and consumers are taking advantage of that.”

Despite declines in rentals of movies among dealers, Paul Watson, regional sales manager with Red Distribution in New York, said rental of music DVD titles continues to be a missed opportunity for rentailers.

“It's an underdeveloped category,” Watson said. “There never has been a push for it from within the industry.”

That said, he remains skeptical about the success of DualDisc DVD/CDs, which he says primarily cater to “true fans.”

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