Music DVD a Burgeoning Home Entertainment Market5 Feb, 2004 By: Melinda Saccone
The growth of DVD is bearing fruit for yet another genre -- music DVD. While music DVD remains a relatively small portion of the format's sales and rentals, the genre is expanding.
Last year, unit sales of music DVDs increased 106 percent from the previous year. According to Nielsen SoundScan, consumers purchased 18.7 million music DVDs in 2003, up from 9.1 million in 2002.
The number of titles released on disc has increased threefold in the past five years. At the end of 2003, 1,040 new music titles had been released on disc, according to the DVD Release Report -- up from 244 in 1999. Last year, music discs accounted for 11.4 percent of all DVD releases, up from 6.8 percent in 1997.
DVD has added a new dimension to music delivery. Not only does the format allow for more optimal sound, it carries added value for the consumer with all of the additional features and extras that have become synonymous with the disc.
Like the video market, the ability of DVD to transcend the traditional boundaries of the cassette or, in this case, the CD, has not only opened up new markets for new artists, but has revived the catalogs of some of the most revered.
In 2003, two of the top 10 music DVD sellers were catalog releases. Of the golden oldies, Led Zeppelin DVD held the highest spot on the chart, reigning at No. 2, according to Nielsen SoundScan data. Unit sales of Zeppelin are impressive. They were topped only by newcomer 50 Cent: New Breed, which sold 19 percent more units, according to Nielsen data. The Beatles Anthology was another oldie to hit the top 10 sellers chart, placing at No. 8.
On the supply side, Image Entertainment was one of the earliest studios to embrace music DVD, bowing the most titles in the genre since 1997. Image has released more than 500 music titles on disc since 1997, accounting for nearly 15 percent of all music DVDs released through 2003, according to the DVD Release Report.
In 2003, however, the market dynamics changed. BMG came on strong in 2003, placing 85 titles into the pipeline, according to the DVD Release Report. In addition to BMG, Music Video Distributors' presence in the marketplace increased. Of the 1,040 titles released last year, Music Video Distributors and BMG had market shares of 8.2 and 8.1 percent, respectively, compared to 6.5 and 6 percent, respectively, in 2002. Image Entertainment, which commanded 11.8 percent in 2002, fell to 6.6 percent in 2003. While consumers have primarily purchased music DVD, there is a niche market in the rental arena. Video Store Magazine Market Research estimates that in 2003, rentals of music DVDs generated nearly $46 million in revenue for rentailers.
According to a survey conducted by Video Store Magazine Market Research at the end of January, 18 percent of the independent rentailers carried music discs for rent -- remaining virtually unchanged from about a year earlier. Music discs account for nearly 4 percent of rentailers' total disc inventory, virtually the same as in 2002. While music disc rentals accounted for only 1.9 percent of rentailers' gross revenue, 14 percent of those surveyed plan to increase the amount of music DVD they carry for rent in 2004.