DVD Finally Hits the Big Time
"Open DVD is and will continue to be the future of pre-recorded home entertainment," said DVD Video Group vice president Paul Culberg. The best-selling disc during the pre-holiday period was New Line Home Video's Blade. Warner Home Video's Lethal Weapon 4 and The Negotiator occupied the #2 and #3 spots respectively. Top sellers for the year were MGM Home Entertainment's Tomorrow Never Dies, followed by Columbia TriStar's Godzilla and Air Force One.
Reporting retailers include large-scale music, video, and electronics outlets such as Tower Records, Blockbuster Video, Circuit City, and Best Buy. VideoScan does not gather data from small specialty stores or large discount outlets such as K-Mart, so the actual number of discs and players sold may be higher than reported.
Minneapolis-based Musicland Stores, one of the dominant retailers in the upper Midwest, saw its December DVD sales volume increase five-fold. In the last seven shopping days before Christmas, Musicland customers bought $5 million worth of DVDs---10% of Musicland's total of $50 million for the year. In the same period of 1997, the company did only $1 million in DVD business.
"The popularity of DVD with customers has exploded since its introduction," said Musicland video vice president Peter Busch. "We are seeing continued demand in the first two days after Christmas." Top sellers at Musicland were The Mask of Zorro, Small Soldiers, Gone With the Wind, and Top Gun.
Video and music outlets aren't the only ones to jump on DVD. Computer stores looking for the multimedia tie-in have also taken on the product in big numbers. CompUSA, one of the nation's leading computer retailers, has devoted a surprising amount of floor space to DVD movies, with a wide range of popular titles. The discs---at prices from $19.95 to $29.95---are fetchingly displayed. CompUSA---and other retailers that haven't traditionally carried video---are charging ahead of the many independent video rental outlets that have taken a "go slow" or "wait and see" attitude toward DVD. Local video stores that don't sign on soon with DVD are at risk of being left behind.
In other retail news, the picture was happy overall throughout most of the United States. Retailers report that their numbers were up as much as 5% over 1997, no doubt aided by winter weather that brought customers in from the cold. Discount outlets added tremendously to the total, according to Robert Kahn, publisher of Retailing Today, helping to raise the increase well above his prediction of 2-3%. Online shoppers bought an average of $457 worth of goods during the 1998 holiday season, according to ZDnet, for an estimated total of $2.3-$3.5 billion---two to three times 1997's holiday season total of $1.1 billion.
The $4.8 billion spent on the Internet during the entirety of 1998 is less than 1% of the year's consumer total. Only 1% of all music sold was purchased over the Internet, and only 0.1% of the consumer electronics, according to research firm Jupiter Communications. For now, at least, brick-and-mortar retailers have little to fear from their competitors on the Net.