Audio cassettes share in CD growth

Drug Store News, Jan 3, 1994

Blank audio tapes in drug chains reached less than half the dollar total of blank video, or $64.4 million in sales from October 1992 to October 1993, according to the Nielsen Scan Track multi-outlet report, which showed Maxell, followed by Sony and Memorex, leading the pack.

But Towne-Oller's October'92 to October '93 report shows sales of audio cassette tapes picking up 1 percent in dollars and 4 percent in units, in contrast with flat dollar sales and a 1 percent unit decline for blank videotape sales in drug chains.

The blank audio tape category enjoys a hardware-driven benefit: Compact disc players and audio cassette players coexist in many homes, a situation expected to continue for the foreseeable future because when a consumer buys a new CD, often he wants to duplicate the music on audio cassette to use in another player. This contributes to modest growth--at least in units, if not in dollars--in the audio category.

Compact discs' quality standards and longer playing time continue to boost sales of high bias and longer length blank audio tape for recording, and have led to some product introductions. For example, TDK aims t get consumers to trade up with products like dual-layere SA-X audio tape for use with high-performance component systems. Fuji's new high bias audio tape also offers a top-line niche opportunity.

Still, one buyer says, there isn't much excitement in audio tape. Audio manufacturers aren't turning much attention to promoting audio cassettes. Manufacturers are driven by volume, and it's in video, not audio," this buyer adds.

Audio tape sells well in two-packs, with most drug chains offering some choice of multiple or brick packs. As one buyer notes, "When we run two-packs and lower price points on ads, then we drive more customers through our stores. On the other hand, the multi-pack drives higher dollar sales. So each has its own use."

TOP 6
  Blank audio tape
 (% of dollar sales)
Maxel            22.2%
Sony             20.5
Memorex          19.8
TDK              12.9
Fuji             11.5
Private label     3.4
Source: A.C. Nielsen Co. Scan Track multi-outlet

report.