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HIVE EXCLUSIVE RESEARCH: DVD Accounts for One-Third of Unit Sales in First Half

20 Jul, 2001 By: Melinda Saccone

DVD continues to make strides in overall market share, accounting for more than a third of all unit sales at the end of the first half of2001, according to VideoScan sales data.

At the end of the first half of this year, DVD sales accounted for 35.5% of total sales, while VHS sales slipped to 64.5%. Despitea decline in overall sales in the second quarter compared to the first, DVD's market share grew 2.5% points.

In the first half, DVD dominated the foreign genre in the sellthrough arena with 85.7% of all first-half sales, boosted mostly byColumbia TriStar Home Entertainment's Crouching Tiger, Hidden Dragon.Tiger was No. 2 on the top 10 DVD list for the first half.

DVD is also making strides in three other genres, accounting for more than 50% of all sales in the first half of 2001 in the action/adventure genre (50.1%), sci-fi genre (55.4%) and mystery/suspense genre (53.7%).

However, VHS maintains its stronghold in the children and family markets, which DVD has been slow to penetrate. In the first six monthsof the year, VHS sales accounted for 95.9% of all sales in the non-theatrical children's genre and 82.6% of all sales in the family genre. VHS also remains firmly entrenched in the fitness market, with 98% of first half sales going to the VHS format.

Consumers continue to choose discount mass merchants, such as Wal-Mart, Kmart and Target, as their primary place of purchase, with 57.6%of all units (DVD and VHS) sold in the first half of 2001 falling to this group. Discount mass merchants' main hold is still in the VHSmarket with 69.5% of VHS sales. These VHS giants sold just slightly more than one-third (36%) of DVD units in the first six months of the year.

While DVD sales are more evenly distributed across sales channels, the segment that includes consumer electronics chains, such as Best Buy and Circuit City, remain the market leaders in DVD sales. This group seized38.3% of the DVD sales, but just 6.9% of VHS sales infirst half 2001.

Specialty retailers, which include independent retailers as well as specialty chains, claimed 18.8% of sales in the first six months of the year. While this group accounted for only 15.6% of VHS sales in the first half, it grabbed 24.6% of DVD sales.

Comedies remain sellthrough consumers' genre of choice, grabbing 18.4% of combined VHS and DVD sales in the first half of the year.

Action/adventure releases placed second in combined DVD and VHS sales, with a 17.7% market share.

While the children's genre accounted for just 12.1% of combined DVD and VHS sales in the first half of the year, the genre owns five of the top 10 spots on the VHS sellers chart. Leading the VHS pack is Buena Vista Home Entertainment. While the studio finished No. 2 in overall DVD and VHS market share for first half 2001 (18.7%), Buena Vista wasthe undisputed leader in VHS market share, with 21.4% of all VHS sales. The studio owns four of the top five spots on the VHS sellerschart.

Despite having only one title on either top 10 list (Miss Congeniality,No. 8, VHS), Warner Home Video (which includes New Line, HBO and PBS) dominated sellthrough in the first half of the year with 22.3% ofall DVD and VHS sales. Pushing the studio into the lead was its strong presence in the DVD market, where it cornered 27.3% of first half sales.

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