HIVE EXCLUSIVE UPDATE 1: The Biggest Quarter in DVD History Begins With a Roar12 Oct, 2001 By: Thomas K. Arnold
What observers predict will be the biggest quarter in DVD history began with a roar last week. Consumers snapped up more than 2 million copies of The Mummy Returns its first week in stores, while retailers braced themselves for a sales showdown of the classics with the arrival in stores of Snow White and the Seven Dwarfs and The Godfather trilogy, both on the same day (Oct. 9).
Thanks to these and other high-powered releases — including Star Wars: Episode One — The Phantom Menace, out this week — experts predict total consumer spending on DVD software during the quarter could top $2 billion, nearly two-thirds of what was spent in all of calendar 2000.
Suncoast Motion Picture Co., a national chain of nearly 400 video sellthrough stores, said Oct. 9 was the biggest day for DVD sales all year, with Snow White racking up the most sales and The Godfather a close No. 2.
Snow White and The Godfather, never before available on DVD, immediately shot to the top of the Amazon.com DVD sales charts. Indeed, Godfather was No. 1 for a week before its release, despite a hefty minimum advertised price of $75.
“Godfather and Snow White have been big sellers for us, occupying the No. 1 and No. 2 positions in the top sellers list for the last eight to 10 days,” says Bill Carr, Amazon.com's divisional merchandise manager for music and video, though he declined to reveal how many copies of either title were presold.
Amazon regularly promotes new and upcoming releases on its Web site and suggests purchases in e-mails. As a result, titles not yet released often find a slot in the sales lists. Next week's big release, Star Wars: Episode One — The Phantom Menace, spent much of last week at No. 2.
The day after Snow White was released, marketing executives at Disney trumpeted what they called a new first-day sales record: 1 million copies of the two-disc DVD set sold through to consumers, thanks in large part to a massive advertising campaign that ranged from prime time TV spots to billboards and a variety of cross-promotions and partnerships.
“This demonstrates the demand for what we consider the most classic of Disney movies on the DVD format,” says Bob Chapek, Buena Vista Home Entertainment's president and chief architect of the supplier's family-friendly DVD strategy. Chapek says because “this is the first time we've done a DVD-only title,” he has no comparative sales figures, but believes the growing family market for DVDs will make Snow White both a top seller and an evergreen. “Snow White is one of those titles that has a lot of promise as being the first DVD a family will buy,” he says.
Paramount Home Entertainment executives won't comment on early sales of the five-disc Godfather set, which includes all three Godfather movies and more than three hours of special features, including a made-for-DVD commentary on all three films from director Francis Ford Coppola. But field reports indicate the DVD is a strong seller, with initial shipments at some stores selling out the first day.
Meanwhile, The Mummy Returns, the first (Oct. 2) big title to hit DVD in the fourth quarter, has broken all first-week sales records for DVD, according to Universal Studios Home Video. Of an initial DVD shipment of 4.5 million units, more than 2 million copies sold through to consumers in the title's first week in stores, studio sources say.
Total combined VHS and DVD shipments are nearly 10 million, Universal says, of which an estimated 1.3 million ended up on rental shelves. There, the first-week take was an estimated $12.2 million, according to Video Store Magazine market research.
“Let the games begin,” says an enthusiastic Craig Kornblau, president of Universal Studios Home Video. “In-the-street prognosticators have been forecasting a record-breaking fourth quarter for DVD and clearly, looking at the initial demand for this title, I think we're going to prove them right — and then some.”
Key retailers are upbeat about preliminary sales.Wherehouse Entertainment was “very aggressive” on both The Godfather and Snow White, according to Paul Ramaker, v.p. of merchandising for movies. Expanded DVD sections and standees filled with DVDs grace “virtually all” of the Torrance, Calif.-based audio-video combo chain's 414 stores, Ramaker says.
“We're expecting big things from both titles,” he says, noting he's also “very happy” with sales of The Mummy Returns, which kicked off what he believes will be a highly charged sales season with “hits [that] just keep coming virtually every week” until the holidays.
Studio executives expressed a keen interest in what these three key DVD releases were doing at retail, dispatching teams of marketing executives into stores for anecdotal research.
“We all went out to do store checks over the weekend,” says Universal's Kornblau.Paramount Home Entertainment's top executives — led by executive v.p. Meagan Burrows, senior sales v.p. Ken Williams and senior marketing v.p. Michael Arkin — hit the streets the day The Godfather was released, checking in at such key retailers as Best Buy, Target Stores, Wal-Mart, Costco and Wherehouse.
“They were thrilled at what they found,” says publicity v.p, Martin Blythe. “At most stores, it was selling like hotcakes; some had run out already and were restocking. At one store, which had run out, they found 30 copies in the back office and while they watched, 10 of them sold through.”
More high-powered DVDs are in the pipeline: Star Wars: Episode One — The Phantom Menace arrives Oct. 16, followed by Dr. Dolittle 2, Oct. 23; Swordfish, Oct. 30; Shrek Nov. 2; Lara Croft: Tomb Raider, Nov. 13; Dr. Seuss' How the Grinch Stole Christmas and Planet of the Apes, Nov. 20; Jurassic Park III, Dec. 11 and Moulin Rouge, Dec. 18.
“We've got five precious gems in our crown: The Mummy Returns, Shrek, Grinch, The Land Before Time and Jurassic Park III,” said Universal's gleeful Kornblau.
Analyst Tom Adams of Adams Media Research believes total DVD sales for the fourth quarter could come in at 75 million units, at a total consumer price tag of $2 billion.
“We're going to see the percentage going to catalog classics jump dramatically because a lot of catalog titles are coming out,” Adams says. “That kind of fulfills the promise of DVD. To date sales have been dominated by new hits, but that's because we haven't seen things like Godfather and Snow White.
“Now that we've got 25 million DVD homes, by year's end, we're going to see more crown jewels like these coming out.”
Additional reporting by Joan Villa and Jessica Wolf.