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January Video Sales Revenue Jumps More Than 8 Percent

17 Feb, 2005 By: Judith McCourt

Holiday purchases of DVD hardware pushed January's video software sales higher this year.

Consumers spent $1.19 billion on video sales for the month, up 8.4 percent from the adjusted four-week period in January 2004.

Fourth-quarter shipments of DVD hardware to dealers registered 6.68 million units, according to the Consumer Electronics Association. With a glut of DVD hardware on the market, low price points and widespread availability, players were an easy purchase for the VHS laggards.

By the end of the year, Home Media Research placed DVD playback capability in more than 70 percent of U.S. households.

Hardware newbies and consumers who just didn't get the DVD they wanted over the holidays were eager buyers in January. DVD unit sales for the month, according to Home Media Research estimates, were up 16 percent for the four-week period. DVD revenue registered $1.15 billion, up 15.2 percent from the $998 million spent in the comparable period of 2004.

More than three-quarters of the January DVD sales occurred in the mass merchant, discount and grocery channels, according to Nielsen VideoScan. Home Media Research's 2004 consumer study indicated that 65 percent of consumers buy DVDs at discount and club stores.

The uptick in DVD purchases more than offset the 58 percent decline in cassette sales. Cassette sales plummeted to $42.78 million in January, according to Home Media Research estimates. VHS sales accounted for less than 5 percent (3.6 percent) of the overall January tally.

Home Media Research estimates put cassette sales at 4.5 million units for the month, with about one-third coming from children's non-theatrical product. Twenty percent of all children's nontheatrical sales are still cassette purchases, according to Nielsen VideoScan data. Fitness titles also continue to attract VHS buyers, with 28 percent of that genre's purchases being made in that format. Children's nontheatrical product accounts for 6.3 percent of all combined (DVD and VHS) unit sales, while fitness makes up 1.9 percent.

Warner Home Video, which includes New Line and HBO product, dominated the market share sweeps. Warner's strong showing in DVD and VHS landed the supplier a 20.7 percent share, according to Nielsen VideoScan data. Warner's strength comes from a diversified product line where big hits bolster its steady flow of catalog and TV product into the retail stream. Home Media Research estimates put the studio's market share based on dollar sales at 23.4 percent for the month.

Troy, an early January release, was consumers' top pick for the month with Home Media Research estimating the epic's sales at close to 3.5 million units for the month. The title sold almost twice as much as its next closest competitor Universal Studios Home Entertainment's Friday Night Lights (2 million units). Other top sellers included New Line Home Entertainment's Harold and Kumar go to White Castle (800,000 units) and Catwoman (740,000 units).

Twentieth Century Fox Home Entertainment (14 percent market share) and Buena Vista Home Entertainment (11.9 percent) rounded out the top three players in unit sales. Dollar sales estimates flip the results, with Disney landing in the No. 2 spot (13.7 percent) and Fox finishing at No. 3 (13.4 percent).

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