Changing video market shifts to children's DVDs - Video & DVD - Statistical Data Included

DSN Retailing Today, Feb 11, 2002 by Doug Desjardins

While DVD is poised to overtake VHS in most major categories, sales of videocassettes still hold a comfortable lead in the children's video arena. But recent trends indicate DVD isn't just for adults anymore.

Now that DVD players are in 25 million households--and millions more if you include the DVD capability of game consoles and computers--many studios have decided the time is right to release children's titles for the first time on DVD. Universal Studios Home Video reported strong sales of the DVD debut of "The Land Before Time" in December and will release its direct-to-video sequel "Balto 2" on VHS and DVD on Feb. 19.

"Kid's titles have remained mainly on VHS up to now because it's a kid-friendly format, but the market is changing," said Universal Studios Home Video spokesman Evan Fong. "A lot of families got DVD players for Christmas during the holidays and it's really becoming mainstream."

Sony Wonder tested the DVD market last December when it released a collection of holiday classics from Golden Books that included "Frosty the Snowman" and "Rudolph the Red-nosed Reindeer." They sold well enough to convince Sony kids and their parents are ready to make the leap from VHS to DVD.

"It was an easy decision because it was driven mainly by customers who were asking for it," said Steve Okin, vp of promotions and marketing for Sony Music. "And we're very excited with the results. It's like getting into the business all over again."

In its early days, the DVD market was driven by early adopters who were primarily tech-savvy young professionals. The first titles to sell more than a million copies were action-adventure films like "The Matrix" that reflected the tastes of a younger audience.

But as hardware prices began to plummet last year, the landscape changed and families began to enter the picture. Now, the entire market is transitioning from VHS to DVD the same way consumers moved from cassette tapes to CDs a decade ago. A sign of the times appeared last December when Dream Works announced it shipped 7.9 million DVDs of its animated hit "Shrek," shattering the old record of 5 million held by "Gladiator.

So it's no surprise studios are moving to capitalize on a segment of the market that is largely untapped. Warner Home Video plans to release many of its new children's titles this year on both VHS and DVD after launching a successful test run in 2001.

"We released one of our older titles, "The Never Ending Story," on DVD for the first time last year and it did extremely well," said Ewa Martinoff, vp of family entertainment marketing at Warner Home Video. "And since then, we've watched the DVD market grow every month."

Martinoff said Warner plans to load its children's DVDs with plenty of bonus footage and extras designed for a younger audience.

"Kids are more into funny things like bloopers and interactive options like games and puzzles, and those are the kind of extras you'll see on the DVDs," said Martinoff. "So they'll have lots of added value, but for a different audience." The Warner DVD debut of two Mary-Kate and Ashley titles, "Passport to Paris" and "Winning London," on Feb. 12 will feature extras that include cast and crew information, fashion close-ups and trailers not featured on the VHS version.

Columbia TriStar Home Entertainment already has four DVD titles from its "Dragon Tales" franchise in the market, and also bowed Porchlight Entertainment's first "Jay Jay the Jet Plane" DVD offering, "Adventures in Learning," on Feb. 5. This title features several special extras the studio will include on many of its children's DVDs.

"It has sing-alongs, educational tools called "Think-About Moments" and special ROM links to games," said Jennifer Anderson, director of marketing for Columbia TriStar. "And we include an option for English subtitles for kids that are learning how to read. All the extras are deigned for a young learning audience."

Artisan Home Entertainment found the added extras it included on the November DVD release of "Barbie in the Nutcracker" were popular with viewers.

"We included a short documentary on the New York City ballet and an "Act with Barbie" feature that provided kids with some positive role playing," said Glenn Ross, head of Artisan Home Entertainment.

"The educational value of these features is something we're excited about."

Smaller studios are also getting involved. Big Idea Productions made its DVD debut last year with "Lyle the Kindly Viking" and "The Ultimate Silly Songs Countdown" and watched sales explode.

"We're still getting new orders every week and have sold hundreds of thousands of units on those two titles so far," said Dan Merrell, senior vp of sales and marketing for the Chicago-based studio. "And both titles are selling more units on DVD than on VHS, which is something we didn't expect."

This year, Big Idea plans to release 13 new DVD titles, including two titles from its popular "Veggie Tales" franchise, on April 2. Merrell said the kid's DVD market is accommodating to small studios right now because demand is high and supply is low.