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THE TOP 100: DVD Sellthrough Revenue Generators -- Changing of the Guard

29 Apr, 2002 By: Thomas K. Arnold

This week, Hive4Media will bring you Video Store Magazine's Exclusive Annual Research bonanza, the Top 100. Two parts of this unique research series will appear every day this week in this space. Today we begin the series with a look at the Top 10 video revenue geneartors and the Top 10 DVD revenue generators . To view supporting charts and tables, see your copy of Video Store Magazine.

There was a changing of the guard among the nation's top DVD sellthrough revenue generators as mass merchants got serious about the burgeoning digital format and stepped up their commitment.

Wal-Mart tapped Warner Home Video as its video “category captain” and began putting up merchandisers with low-priced catalog DVDs in high-traffic aisles. By the end of 2001, the chain had surpassed longtime leader Best Buy as the nation's biggest retailer of DVD software, with estimated sales of $905.5 million -- more than twice the 2000 tally of $375 million.

“We're doing everything we can to meet the needs of our customers, especially as DVD becomes more and more mainstream,” said Cynthia Lin, media manager for Wal-Mart's online subsidiary, which upped its video inventory to more than 10,000 titles and by the end of the year was selling more DVDs than videocassettes. “DVD is a strong seller, no doubt,” Lin said.

Wal-Mart was hardly alone in aggressively pursuing DVD. At Kmart, spokesman David Karraker said DVD sales growth was in the “double digits,” one of the all-too-few growth areas for the foundering chain. DVD sales for the year increased nearly 50 percent from the previous year.

Target Stores broke into the top five with estimated 2001 DVD sales of $359 million, up from just $138 million in 2000. And Costco, the “big box” club store, moved from No. 6 to No. 4 as DVD sales more than doubled from the previous year to $388.1 million.

A key factor in mass merchants' success with DVD is their strength in sellthrough; with DVD, for the first time every title can be sold directly to consumers. Best Buy posted 2001 DVD sales of $746.6 million for a solid No. 2 ranking and an estimated market share of nearly 15 percent. That works out to an average of more than $1.5 million in DVD sales per store, more than four times Wal-Mart's per-store average of $333,763.

Last year, 83 percent of Best Buy's movie inventory was DVD and just 17 percent was VHS; at Wal-Mart, the split at year's end was still tilted in favor of VHS at about 65 percent.

To read about the Top 10 Video Revenue Generators, click here.

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