November Sales, Still Up Double Digits, Show Signs of Slowing16 Dec, 2004 By: Judith McCourt
November video sales were rosy, but spending is showing definite signs of slowing as DVD enters its first holiday season as a mature product.
Despite the softening in the market, consumers will spend a record amount in 2004 buying videos.
When all is tallied, Video Store Magazine Market Research estimates consumers will spend $15.6 billion on sellthrough product, an 11.4 percent increase from what was spent in 2003. Increases in DVD sales will more than offset sagging cassette sales. Disc sales are expected to account for 94 percent of the final tally.
With DVD penetration exceeding 70 percent, according to Video Store Magazine Market Research estimates, sales are beginning to soften. November sales rang in at $1.70 billion, 11 percent ahead of the comparable $1.53 billion spent in November 2003. By comparison, November 2003 posted a 29 percent gain from sales in November 2002.
Hot fourth-quarter releases have failed to ignite the same enthusiasm from consumers that last year's offering spawned. The top 10 sellers in November collectively sold just more than 34 million units, according to Video Store Magazine estimates. By comparison, consumers bought just shy of 47 million copies from the basket of top 10 November 2003 releases.
The top seller for November was Shrek 2, DreamWorks Home Entertainment's summer blockbuster, which debuted Nov. 5 and posted sales of more than 14 million units in its first month of release, during which the ogre generated an estimated $256 million at retail, with an estimated 88 percent coming from disc sales.
Shrek 2, hoping to unseat 2003's top-selling champ, bowed on the same release date as Finding Nemo. During its first month of release the little fish racked up big sales, selling more than 20 million units and generating an estimated $355.9 million in consumer sales.
Nemo, a Buena Vista Home Entertainment release, went on to be the best-selling title for 2003 and holds the position of the top selling DVD of all time.
Harry Potter and the Prisoner of Azkaban, a Warner Home Video release, was the No. 2 seller for the month. In its first week out, the third in the “Harry Potter” series pulled an estimated $117 million. The title sold 6.5 million, with 6.1 million or 94 percent coming from DVD sales. By comparison, the No. 2 seller in November 2003 was The Santa Clause 2, which sold just less than 4 million units with an estimated retail value of $72.6 million.
While sales of the theatrical blockbusters may be slowing, TV DVDs are booming. TV DVD is expected to generate more than $2 billion in consumer sales in 2004. Adding to the coffers is Sony Pictures Home Entertainment's “Seinfeld” series. The long awaited “Seinfeld” series was released Nov. 23, and, collectively, the first three seasons are closing in on the 1.5 million mark, according to Video Store Magazine estimates.
With the market share race coming to a close, Warner grabbed the No. 1 spot in November with 24.6 percent of the overall take. Its strong showing of fourth-quarter releases, including Harry Potter: The Prisoner of Azkaban and sister company's New Line Home Entertainment's Elf coupled with a strong showing in catalog sales, all but assures Warner the nod as the 2004 market share leader. Warner is expected to finish the year strong with sales of Potter expected to hold, and the extended version of The Lord of the Rings: The Return of the King bowing mid-December at the height of the holiday buying season.
DreamWorks Home Entertainment finished in the No. 2 spot for the month, with 15.4 percent of the overall monthly take. In addition to the top-selling Shrek 2, The Terminal and Shrek boosted the supplier's revenue.