We have been documenting the slow death of CDs over the past 7 years. This year brought the first slowing sales in that other shiny polycarbonate disc, the DVD.
In a recent report, Alliance Bernstein Research observed that through early December, DVD sales
were down 4.1% YTD, including a 2.1% decline in Q4. Bernstein cited data from Nielsen VideoScan.
DVD sales were flat in 2006,pulling in the same ~$16 billion as 2005. Total home video revenues — including both sales and rentals — looks like they will hit ~$23 billion in 2007. That’s a $ billion shy of 2006 revenues.
These are only minor drops, but what makes them significant is that, no matter how you measure it, 2007 is the first negative year-over-year sales growth since DVDs came to market.
I suspect that the usual attention scarcity — which have been hurting CD sales — are also be impacting DVDs. And DRM certainly isn’t helping (What do you mean I can’t watch this DVD on my iPod?). However, DVD buyers are also wrestling with the additional factor of the latest format war.
Speaking personally, I’ve throttled back on my DVD purchases, as I await the winner of the HD/Blu Ray battle. Whatever DVDs I buy these days are disposable/rental priced (i.e., $5.99). The various HD formats are much pricier, and until that fight gets resolved, I, like many consumers, are buying less (Do I want this in HD? Gee, I better wait). Who wants to get stuck (again) with another extinct format?
There may be other macro factors at play: namely, an over-extended consumer. That showed up in not just DVD and CD sales, but in concert ticket revenue, also.
Despite several big "reunion" tours — the Police, Van Halen and Genesis — the total North American concert industry posted its slowest year since 2004. According to Pollstar, the top 20 tours generated $996 million, down 15.6% percent from 2006 totals. The 2004 total was $951.1 million, when Prince and Madonna were touring. Perhaps a long tail effect is spreading less revenue to more bands.
Here’s the specifics on revenue and ticket prices:
Top 20 Selling Tours of 2007 (Millions)
|1.||The Police||$ 131.9|
|2.||Kenny Chesney||$ 71.1|
|3.||Justin Timberlake||$ 70.6|
|4.||Celine Dion||$ 65.3|
|5.||Van Halen||$ 56.7|
|6.|| Tim McGraw
and Faith Hill
|7.||Rod Stewart||$ 49|
|9.||Josh Groban||$ 43|
|10.||Rascal Flatts||$ 41.5|
|11.||Dave Matthews Band||$ 41.1|
|12.||Billy Joel||$ 39.1|
|13.||Roger Waters||$ 38.3|
|14.|| Bruce Springsteen
& The E Street Band
|15.|| Hanna Montana
/ Miley Cyrus
|16.||Elton John||$ 35.7|
|17.||Jimmy Buffett||$ 35.6|
|18.||Barry Manilow||$ 34.8|
|19.||Toby Keith||$ 34.3|
(Based on total dollar volume of tickets sold)
An interesting side note: The average price of concert tickets (sold through StubHub’s secondary market) in 2007 was $117 — a price decrease of $28 per ticket compared to 2006. Note that these are not face value, but secondary (scalped) tickets.
Highest Average Ticket Price of 2007
|1.||Celine Dion||$ 347|
|2.||Elton John||$ 260|
|3.||Hannah Montana||$ 257|
|4.||Eric Clapton||$ 253|
|5.||Bon Jovi||$ 239|
|6.||Bruce Springsteen||$ 226|
|7.||Van Halen||$ 217|
|9.||The Police||$ 209|
|10.||Michael Buble||$ 195|
(For tours that sold over 3,000 total tickets)
Source: CNN Money, Stubhub
You something unusual is occurring in the economy when consumers pull back on their entertainment spending . . .
CDs Are Dying. Are DVDs Next?
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Big media sees reversal of fortune
Hollywood Reporter, Dec 11, 2007
NYPost, December 4, 2007
The Police Lock Top 2007 Tours Spot
Wednesday, Dec 26, 2007 1:02PM
U.S. concert business slumps despite reunion tours
Reuters, Sun Dec 23, 2007 12:44pm EST
2007 StubHub Concert Ticket Annual Report 2007
December 05, 2007: 06:12 PM EST
The Life Cycle of a CD or DVD