Continuing a slow but steady decline that began last year, consumer home video spending slipped 3.7 percent 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 percent, to $7 billion, while rentals fell 3.9 percent to $3.9 billion.
Studio executives aren’t surprised, saying that the now-mature DVD business has become increasingly product-driven. More than 80 percent 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 percent 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 box-office strength of DVD releases in those months was down 3.2 percent from DVDs that had come out in January and February 2005 — led to a 13.1 percent decrease in consumer video spending, Home Media Retailing market research shows.
SPRING UPTURN
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.
[All Business]
