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Panel: DVD Sky Isn't Falling

27 Jul, 2005 By: Jessica Wolf

Slowing growth in DVD sales, a flat rental market, a slumping box office — these things do not spell doom for home entertainment products, said panelists at yesterday's “DVD's Growing Pains” session during the Home Media Retail Summit.

“I don't think the sky is falling, and I don't think we are in trouble,” said Simon Swart, EVP of sales for Twentieth Century Fox Home Entertainment. “We have a very mature category, but all of our research indicates we will see 8 percent growth year over year for the next few years.”

Year-to-date, business is up 4 percent, he said.

As for the oft-discussed shelf-space crunch and competition for product facings at retail, it's mostly a mass merchant issue, said Kevin Cassidy, EVP of Tower Records and Video.

“Retailers like us are devoted to carrying a broad selection of product,” Cassidy said.

Perhaps it's time for the specialty retailer to look for ways to strengthen its presence in its own market, said Tom Adams, president of Adams Media Research. Video is the only packaged-good market in which specialty retail is not the leading sales channel, Adams noted. Specialty bookstores make up about 50 percent of sales in that market, and specialty video game stores garner about 40 percent of sales for those goods, Adams said.

One big opportunity for video retailers is in TV DVD, panelists agreed. Fox's Swart estimates the genre makes up 24 percent of sales for the studio. About two dozen retailers in the audience were eager to dive into the TV DVD discussion, some saying they have found profit in renting TV product in individual discs. Retailers in the audience said studios should drop prices on earlier seasons of multi-season sets and also create rental-friendly packaging.

Though previous seasons of TV DVD sets move quickly out of the big-box chains like Best Buy, Wal-Mart and Target Stores, consumers still are looking to find releases of their favorite shows in stores, even if those same titles are easily available for online purchase or rental, said Gord Lacey, editor of TVShowsOnDVD.com.

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