'narnia' Tops Slow 1st Half For Dvd Sales

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 spending is driven by boxoffice hits coming to DVD, the rest of the year looks fairly strong, given the theatrical rebound so far this year. Through last weekend, theatrical receipts were up 4.5% from the same period last year, and ticket sales have been up from the previous year for 13 of the past 14 weekends.

"Product cycles are inevitable," New Line Home Entertainment president Steven Einhorn said. "Given that the DVD business is in its mature stage, and considering the size of the marketplace and the competition, I think we are still doing a good job of satisfying the needs of consumers."

Said Lionsgate president Steve Beeks: "DVD continues to play a significant role in driving profits for the entertainment industry, and we expect that to continue for many years to come."

In market share, Warner Home Video, as it has for the past several years, leads the pack with an estimated 20.6% share of all video sales. Buena Vista Home Entertainment finished its traditional second, with 16.6%, followed by 20th Century Fox Home Entertainment, with 12.8% — a number that likely will go up as the year progresses now that the studio has taken over distribution of MGM titles from Sony Pictures Home Entertainment.

Universal Studios Home Entertainment, not counting DreamWorks titles, finished the first half of the year with an estimated market share of 11.6%. Sony had a first-half market share of 11.2%, followed by Paramount Pictures Home Entertainment with 9.5%. Lionsgate, buoyed by such top sellers as "Saw II" and "Crash," had less than 5%.

The top-selling DVDs so far this year, according to Home Media Retailing market research estimates: Buena Vista's "Narnia," in first place, with 11.8 million units sold, followed by Warner's "Goblet of Fire" (10.9 million units).

New Line Home Entertainment's "Wedding Crashers," released in the lucrative early January slot, came in third with estimated DVD sales of 8.4 million units, followed in fourth place by Universal's "King Kong," which has sold an estimated 7.2 million units since its late-March release.

20th Century Fox's Johnny Cash biopic "Walk the Line" is fifth with 6.3 million units, followed by a trio of Buena Vista titles: "Chicken Little" (No. 6, 5.4 million units), the Platinum Edition DVD of the animated "Lady and the Tramp" (No. 7, 4.9 million) and the direct-to-video sequel "Bambi II" (No. 8, 3.5 million).

Rounding out the top 10 DVD sellers for the first half of this year are Universal's "Jarhead" at No. 9, with less than 3.5 million units, and Buena Vista's "Flightplan" at No. 10, with 2.9 million units.