DVD sales offset music losses

DSN Retailing Today, May 3, 2004

Retailers can anticipate music and video sales to maintain a balance this year as the ongoing rise of DVD makes up for the continued decline of CD sales. That was one of the key topics discussed at the 34th Annual Recorded Media Forum hosted by the International Recording Media Association (IRMA).

"DVD gains this year should offset losses in CD sales by about 300 million," said IRMA president Charles Van Horn, who said replicators are expected to produce 17.4 billion DVD and CD discs this year compared to 17.1 billion in 2003.

The bad news for retailers is that DVD sales are starting to slow down after six years of explosive growth, though they are still on the rise. "We saw a 50% increase in volume of DVD shipments in 2003 and will see another 20% increase in 2004," said Jim Bottoms, president of British research firm Understanding & Solutions.

Buena Vista Home Entertainment president Bob Chapek expressed optimism about the future of DVD sales, even though he acknowledged that "digital downloading will play a significant role in the years to come." Chapek said the challenge for studios this year will test their "ability to come together" and agree on a single format for new high-definition DVD hardware and software.

Bottoms said this year consumer electronics retailers can count on an increase in sales of DVD players that can record programs on blank discs. Sales of recordable DVD players are expected to rise as prices fall from the $300 to $400 range to as low as $150 by the end of the year, he said.