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NARM Survey: DVD Sales Tripled in 2000, Overtaking VHS for the First Time, in Flat Music Market

21 Jun, 2001 By: Hive News

The National Association of Recording Merchandisers (NARM) reported flat music sales in 2000, but sales of video and related products helped bolster revenues for the year, according to NARM's 2000 Annual Survey of its retail and wholesale members.

Survey respondents represent about 80% of the music industry?s chain and independent retailers, Internet pure-play retailers and rack jobbers.

Gross dollar volume for all music products reached $10.46 billion, slightly less than the $10.49 billion reported in 1999. CD album sales grew 3.7% in 2000, increasing to $9.4 billion. Catalogproduct increased as a percentage of sales for the first time since 1996, up to 34.4% of the audio market. Also for the first time, sales of blank CD-Rs registered measurable sales numbers ($14.6 million), while the sales of singles dropped off, slipping 30% to $597.3 million, or just 5.7% of the total audio market, according to the survey.

In the growth areas, DVD sales tripled in 2000, overtaking VHS for the first time. Most of the items in the Related Products categories also registered increased sales. In the online arena, almost 85% of respondents have a Web site and are actively seeking legal content, but sales of digital downloads were almost too small to measure. Rather, NARM members are offering increasingly diversifiedproduct mixes online, reflecting the same trend offline.

"The figures for 2000 clearly illustrate ongoing changes within the music retailing industry. NARM retailers are relying on other ways to connect with their customers, many of which don't involvemusic," said NARM president Pamela Horovitz. "Efforts to expand sales of digital downloads have been hampered by ongoing battles over technology distribution. And retailers seeking to offer legal content in the form of either singles or downloads are being penalized by the lack of offerings fromrecord labels."

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