Purchases of homevideos in 1997 were off by 10% over the 1996 tallies, while rentals dropped 3% during the year, according to a year-end summary released Monday by vid industry research and consulting outfit Alexander & Associates.
The drop in sales was most prominent among the family fare vids, while the rental marketplace was sustained by the vid release of blockbuster films made available primarily in the fourth quarter.
Vid purchases accounted for 657.3 million units in 1997, compared with 735 million units in 1996, a 78 million unit decline.
The dollar value of the vid sales market checked in at $9.3 billion, a $1 billion drop over the $10.38 billion tally registered in 1996; rentals reached $4.1 billion, a slight drop from the $4.23 billion logged in 1996. Total consumer purchases of the top 10 titles fell by 32 million units over the top 10 vids in the market during 1996.
The drop in sales marks the first year of negative growth for the market, though the declines were not equally shared by all major categories of titles.
Some categories showed improved volume over last year’s numbers, such as R-rated vids, non-rated and non-theatrical titles, which collectively posted a 2% increase.
But G and PG vids only held 49.9% of the marketplace in 1997, an 11% slip when compared with the 58% share the vids held in 1996.
The study also noted that the top 10 titles in the fourth quarter of 1997 did about 28 million units fewer than the top 10 vids of fourth-quarter 1996. The study further observed that the top-selling title in 1997 would have only ranked fourth in the top 10 list of 1996.
The study cited the lack of a dominant title in the G, PG and PG-13 categories — typically dubbed the family film category — as among the factors for the decline.
“Toy Story” “Babe” and “Pocahontas” led the vid sales chart in 1996, compared with “Independence Day” “Bambi” and “The Hunchback of Notre Dame” at the top of the 1997 list.
“Consumers are picking and choosing,” said Barbara McNamara, G.M. of Video Flash, a weekly tracker of homevideo sales and rental action. “Given the lack of lead titles in 1997, the strength of these other categories is impressive,” she added.
The 1997 rental market dropped sharply during the first five months of the year, primarily because of the shortage of good product. As a result, the market emulated 1987 levels, before rebounding by the end of May.
Though vid rental tallies were off as much as 9% by the end of May, the market rebounded to post just a 3% decline by year’s end.
‘Maguire’ fuels comeback
The comeback was credited to the vid bow of “Jerry Maguire” and a string of strong releases, such as “Face/Off” and “Men in Black,” going into the fourth quarter.
The marketplace also was helped by a hefty number of pics grossing $100 million in domestic box office, an important watermark as it garners the interest of consumers.
Whether the vids were targeted to the rental or purchase markets, the high grossing pics all rented strongly in the fourth quarter and contributed significantly to the market’s recovery by the end of the year.
With VCR penetration at 92% in households with cable TV, 98% in homes with satellites and 94% in homes with kids, studios now must more actively manage their release schedules to provide a steady flow of titles throughout the year, and not merely offer a spurt of sought-after titles in the fourth quarter.
“This market is going to rise and fall on the quality of product presented to it and not on any underlying expansion of the market itself,” said Bob Alexander, prexy of Alexander & Associates. “Managing product flow is the new challenge for (the studios, who along with retailers) now face interesting questions about how to buy and present titles in each of these segments.”