'narnia' Tops Slow 1st Half For Dvd Sales
By Thomas K. Arnold
Friday, June 30 2006
Friday, June 30 2006
Published on AllBusiness.com
Continuing a slow but steady decline that began last year, consumer home video spending slipped 3.7% in the first half of the year, to $10.9 billion, according to preliminary estimates from Home Media Retailing's market research department.
Video purchases are down 3.6%, to $7 billion, while rentals fell 3.9% to $3.9 billion.
Studio executives aren't surprised, saying that the now-mature DVD business has become increasingly product-driven. More than 80% of U.S. households now have at least one DVD player, and the last wave of consumers to ditch the VCR isn't buying nearly as rabidly as the early adopters.
This pattern is reflected in the fact that overall sales of new releases are down about 7% from first-half 2005.
"We predicted the business would be flat this year, and that's what's happening," Sony Pictures Home Entertainment president Benjamin Feingold said.
Consumer spending tends to mirror the strength of the product coming into the market. A weak slate of titles entering the market in January and February — the collective boxoffice strength of DVD releases in those months was down 3.2% from DVDs that had come out in January and February 2005 — led to a 13.1% decrease in consumer video spending, Home Media Retailing market research shows.
Things picked up in March and April, with such hit titles as "Harry Potter and the Goblet of Fire," "Chicken Little," "King Kong" and "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" driving consumers back to the DVD counter.
The combined boxoffice strength of March and April releases was $1.7 billion, 10.7% more than the total for March and April 2005 DVD releases. The business briefly rebounded and for a few weeks in April was tracking in positive territory compared with the previous year.
But then came May and June, with a dismal slate of new releases. The collective boxoffice strength of DVDs that came to market in those two months was just $1.3 billion, off 8.7% from the May and June 2005 slate.
Mike Dunn, president of 20th Century Fox Home Entertainment, put things in perspective.
"In the first half of this year, we've had seven titles that grossed more than $100 million at the boxoffice come to video, and all seven titles fell prior to Easter," Dunn said. "Last year, we had 12.
"So what you saw in the first part of the year was pretty significant growth — nearly 20% growth in sell-through to Easter — and then between Easter and the end of June we've given it all back. The market has been very, very soft," he said.
The good news for home entertainment is that if consumer
Video purchases are down 3.6%, to $7 billion, while rentals fell 3.9% to $3.9 billion.
Studio executives aren't surprised, saying that the now-mature DVD business has become increasingly product-driven. More than 80% of U.S. households now have at least one DVD player, and the last wave of consumers to ditch the VCR isn't buying nearly as rabidly as the early adopters.
This pattern is reflected in the fact that overall sales of new releases are down about 7% from first-half 2005.
"We predicted the business would be flat this year, and that's what's happening," Sony Pictures Home Entertainment president Benjamin Feingold said.
Consumer spending tends to mirror the strength of the product coming into the market. A weak slate of titles entering the market in January and February — the collective boxoffice strength of DVD releases in those months was down 3.2% from DVDs that had come out in January and February 2005 — led to a 13.1% decrease in consumer video spending, Home Media Retailing market research shows.
Things picked up in March and April, with such hit titles as "Harry Potter and the Goblet of Fire," "Chicken Little," "King Kong" and "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" driving consumers back to the DVD counter.
The combined boxoffice strength of March and April releases was $1.7 billion, 10.7% more than the total for March and April 2005 DVD releases. The business briefly rebounded and for a few weeks in April was tracking in positive territory compared with the previous year.
But then came May and June, with a dismal slate of new releases. The collective boxoffice strength of DVDs that came to market in those two months was just $1.3 billion, off 8.7% from the May and June 2005 slate.
Mike Dunn, president of 20th Century Fox Home Entertainment, put things in perspective.
"In the first half of this year, we've had seven titles that grossed more than $100 million at the boxoffice come to video, and all seven titles fell prior to Easter," Dunn said. "Last year, we had 12.
"So what you saw in the first part of the year was pretty significant growth — nearly 20% growth in sell-through to Easter — and then between Easter and the end of June we've given it all back. The market has been very, very soft," he said.
The good news for home entertainment is that if consumer
