Home Video

Drug Store News,  May 21, 2001  by Allene Symons

• E-mail
• Print
• Link

Despite 2000's slow-motion finale, the home video category showed little sign of lost luster, thanks to a new format and the resilience of the entertainment industry.

Old and new formats--VHS and DVD--vied for precious shelf space in drug chains. By the end of the year, VHS remained the dominant format, but as CVS spokesman Michael DiAngelis recently noted, "the increasing affordability of the hardware has helped increase household penetration" for DVD.

More drug chain customers are buying DVDs, as was evident in a study by New York City-based research firm Alexander & Associates, which tracks VHS and DVD products. Its latest study of store-data (excluding on-line and catalog sales) showed that in 2000 the drug channel's DVD unit volume grew from 1.1 percent of all retail units sold in 1999 to 2.4 percent of units sold. Meanwhile, VHS unit sales in the drug channel declined slightly from 1.8 percent in 1999 to 1.7 percent of retail units sold in 2000, according to Greg Durkin, research director for Alexander & Associates.

As noted in a previous issue of Drug Store News, the five top VHS sellers for 2000 were mainly family titles, headed by bestseller "Tarzan" (Buena Vista), followed by "Star Wars: Episode 1" (Fox), "Toy Story 2" (Buena Vista), "Stuart Little" (Columbia TriStar), and "Little Mermaid IV: Return to the Sea" (Buena Vista), according to Video Business magazine.

In contrast, a look at the top five DVD sellers for the year shows an emphasis on action and special effects, led by top seller "Gladiator" (DreamWorks/Universal), and followed by "X-Men" (Fox), "The Sixth Sense" (Buena Vista), "The Matrix" (Warner), and "The Patriot" (Columbia), according to Video Business.

On a related note, Eckerd is also seeing sales growth in pre-recorded music and is trying interactive games. Category manager Dan Findlan recently offered this view: "The trend toward more in-home entertainment will continue ... in video [VHS or DVD], and computer software games." But he noted that long term, he expects the MP3 files to significantly impact the music business and on-demand video to have an impact on the sale of pre-recorded products.

In a soft economy, drug chains like the scenario of the home entertainment category. Earlier this year Carol Hively of Walgreens said, "We don't expect an economic downturn to hurt this category, if anything it would help the category." Similarly, DiAngelis at CVS said, "We don't believe [an economic downturn] will impact the category at CVS one way or the other."

Besides adjusting the mix of VHS and DVD in 2000, CVS changed fixtures to allow more flexibility in the merchandising of video. And Hively of Walgreens told Drug Store News that this year (2001) the chain will be "changing strategy to accommodate new segments."

One of those segments is the DVD format, or as Findlan noted: "DVD will continue to grow, especially titles released concurrently with VHS versions that some studios like Disney are now releasing." He expects these to be the strongest sellers for Eckerd. "Family films will always be the top sellers," said Findlan, "whether VHS or DVD."

                        BLANK AUDIO/VIDEO TAPES
Mass          $382.5 [*]  -1.3%
Food           $64.2 [*]  -7.3%
Drug          $151.3 [*]  -6.6%
Total F/D/M:  $598.0      -4.6%
Source: Information Resources Inc.
for the 52 weeks ended Dec. 31, 2000
(*.)All sales in millions.
Note: Table made from pie chart
                        DVD gains in drug stores
      Market share [*]  Market share [*]
Year        DVD               VHS
1999        1.1%              1.8%
2000        2.4               1.7
Source: Alexander &
Associates
(*.)Unit sales as a
percentage of all home
video sold in all brick-
and-mortar retail stores
(excludes mail order,
Internet)
                         Drug chains' scorecard
                        blank audio/video tapes
                     $ sales      %
Segment            in millions  change
Blank audio/video
tapes                $121.6     -3.9%
Source: Information
Resources Inc. for the 52
weeks ended Dec. 31, 2000

COPYRIGHT 2001 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2008 Gale, Cengage Learning