July Sellthrough Fireworks Lead to Double-Digit Growth25 Aug, 2005 By: Judith McCourt
After several months of slower-than-expected growth in the DVD business, things are beginning to look up. July video sales are projected to come in at an estimated $907.82 million, a healthy 11.9 percent increase from the comparable four-week period in 2004, according to Home Media Research.
That puts the business back on the double-digit growth trajectory it saw in the first quarter but then lost as a weak slate of titles came to video — slowing sellthrough growth for 2005, through July 31, to an estimated 3.3 percent compared to the same period in 2004.
Credit for the upturn goes to Warner Home Video's Million Dollar Baby and Constantine, each of which sold more than 1.5 million units. July's top five sellers sold 18.4 percent more units than the top five sellers of July 2004, according to Home Media Research.
The strength of Million Dollar Baby and Constantine helped Warner retain its top market-share position, with the studio — together with distributed labels HBO Video and New Line Home Entertainment — snagging 26.4 percent of total sales for July.
Sony Pictures Home Entertainment, which now includes MGM, finished at No.2, with 18.4 percent of July video sales. Sony was powered by two top 10 sellers: XXX: State of the Union at No. 6, with more than 500,000 units sold, and Hitch (No. 7), a June release that sold an estimated 450,000 units in July.
But July's projected sales gains aren't just the result of strong theatricals. TV DVD, with a higher average sales price and longer legs, is a key driver. So far this year, TV DVD unit sales are running more than 25 percent ahead of last year, according to Nielsen VideoScan.
The top 50 DVD sellers chart for July reflects this trend, with two TV DVD releases among the top 15 finishers. Laguna Beach: The Complete First Season, from Paramount Home Entertainment, came in at No. 13, with sales approaching 225,000 units, according to Home Media Research.
Just one perch below, at No. 14, is a holdover from May. Chappelle's Show: Season 2 Uncensored, also from Paramount, sold nearly 200,000 units in July, after nearly two months in stores — underscoring the fact that TV DVD releases tend to have longer shelf lives than flavor-of-the-week theatricals.
DVD accounted for 97 percent of July sales. Videocassette sales generated just $22.2 million in July, down 60 percent from July 2004. In the last six months of 2004, VHS sales generated an estimated $520 million in consumer spending. Home Media Research projects that for the second half of this year, total cassette sales could be as low as $100 million.
At the 30-week point consumers have spent $8.22 billion buying videos compared to $7.96 billion at the same juncture in 2004.