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Music DVDs See Growth Spurt

8 Mar, 2006 By: Jessica Wolf



The music DVD business grew at a higher rate in 2005 than the DVD business overall, according to Nielsen Entertainment research presented Tuesday at the second annual Music DVD Conference.

Excluding CD-DVD combos, suppliers last year sold 21.4 million music DVDs, up from 20.6 million in 2004.That translates to nearly 4% growth, compared with growth of less than 1% for the DVD industry overall.

Even so, music DVDs account for just 2.7% of total music transactions recorded in 2005, the first year the total number of transactions topped 1 billion. CDs still account for the vast majority of music purchases, Nielsen research shows, with 61.7%, followed by digital tracks at 35.2%.

Among retailers, mass merchants are in the lead when it comes to music DVD sales, enjoying 7% growth in 2005. Also on the upswing is the DualDisc, a hybrid that consists of a bonded disc with CD content on one side and DVD content on the other.Nielsen research shows that since the format's official bow in February 2005, 9.7 million DualDiscs have been snapped up by consumers, or 15% of total music sales.

During the conference, produced by Home Media Retailing in partnership with The Hollywood Reporter, DEG: The Digital Entertainment Group and the Video Software Dealers Association, panelists discussed ways to grow the market while realizing music DVDs always will be a niche business.

Music DVDs can serve as a strong branding opportunity for an artist or group, said Sony BMG Music Entertainment SVP of sales Harry Safter. His company's release of a Los Lonely Boys DVD served as a bridge between two album releases, keeping interest and visibility high for the Texas-based country-rock group.

Labels primarily consider DualDisc an audio product, and they aren't abandoning the practice of releasing double-disc sets that include both a DVD and a CD. "The days of a single-format world are over," said Bill Sondheim, executive vp at DualDisc Worldwide for Sony BMG.

Also possibly on the horizon are more window-like strategies for music DVDs and the music market as a whole, panelists said.

The ideal window strategy for a music DVD would be to time it with an artist's new album release and tour, offering a digital-cinema blast around the street date and then have a TV airing, said Steve Sterling, SVP of programming and production at Live Nation, formerly Clear Channel Entertainment Home Video.

"If I could schedule that every time, I'd feel good about spending $1 million to $2 million on a release," he said. "But it's still art we are dealing with here, and it's very hard to put art in a bottle, let alone on a schedule."

How to monetize all the opportunities that the Internet and digital delivery can offer is a key issue the business must start addressing to keep up with the consumer, panelists said. Music DVDs need more and better marketing to draw in the core fans and broaden the awareness of product as it streets.

From the retail perspective, music DVD is still a rather mixed bag.

At Tower Records, music DVD makes up a higher percentage of overall DVD sales than the hot TV DVD market, said Kevin Cassidy, EVP of sales and operations for Tower.

Gary Arnold, SVP of Best Buy, bemoaned the lack of a structured, overall strategy for releases in the music DVD genre. “For us, it's a tough sell,” he said. “Unlike CD releases, which get a lot of promotions around street date, the consumer doesn't know what's coming out when; there's no standard presence for music DVD.”

Additional reporting by Angelique Flores

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