APRIL 21 | It’s clear after the first quarter, if it wasn’t before, that DVD sales are at a plateau. Not only has the format’s growth slowed, it has, at least for the first quarter, stopped.
DVD’s small first-quarter slip is reasonably attributed to the relative strength of titles released last year vs. this year and the late Easter holiday. There are reasons to be optimistic about sales for the rest of the year, as several executives point out in our page 1 story, and the studios are actively working to reinvigorate sales. They’re experimenting with price points, especially on TV and catalog titles, shortening windows, refining and more narrowly targeting their marketing, introducing new formats and so on.
Retailers can and should play a role, and there are some interesting insights into how retailers might change consumers’ purchasing behavior in a study conducted recently for NARM by NPD Group.
Music merchants have been fighting to turn around declining sales almost as long as DVD has been around, and audio CD sales face some challenges that, fortunately, do not apply to home video: widespread illegal file sharing over the Internet, the decline of broadcast radio (which has traditionally exposed consumers to new music), consumer price resistance and the related “but I only like one or two songs” lament.
Other challenges, however, such as consumers feeling that their collections are large enough already and using legal download service instead of buying physical media, are shared by music and video retailers alike. Some of the NARM survey findings also might apply to video retailers.
When the NARM survey asked people what was important to them when buying music, the answers were almost too simple: to find the items they wanted in stock; a broad selection, well-organized; and easy check-out.
All retailers need to ask if they’re meeting these basic criteria.
In the NARM respondents’ “nice, but not necessary” category: listening stations and frequent shopper programs. “Not so important”—and these are the things on which retailers often put a lot of emphasis—are digital gift cards, CD burning stations, digital download stations, online sampling, used product and having staff favorites identified.
When asked what would get them to come to the store, shoppers overwhelmingly favored a sale.
“Consumers will be responsive to buying more with classic promotional incentives,” the survey found.
DVD retailers have for the most part already nailed that one.
Some interesting answers came up when the music shoppers were asked what would get them to spend more money on music over the course of the year, however. The No. 1 response was movie DVDs sold with their movie soundtracks, with almost 40% of those surveyed interested in this combination. More than 20% of the people were also interested in TV DVDs sold with their music soundtracks.
Just some food for thought from a group of retailers who are serious about turning around sales.
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