Best Buy Widens Q1 Entertainment Sales Decline

Christmas is officially over. The post-winter holiday blues hit Best Buy entertainment sales with a thud.

The nation’s largest consumer electronics retail chain May 23 reported a 12.7% drop in same-store entertainment sales to $424 million for the quarter ended May 4. The business unit includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

Entertainment sales declined less than 1% to $504 million in the previous-year period.

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International entertainment sales dropped 14% to $33 million, compared to an 8.3% decline to $41.8 million in the previous-year period.

Overall, Best Buy upped domestic operating income 24.3% to $332 million from $267 million last year. Revenue upped less than 1% to $8.48 billion from $841 billion.

The largest comparable sales growth drivers were appliances, wearables and tablets.

Domestic ecommerce revenue of $1.31 billion increased 14.5% on a comparable basis primarily due to higher average order values and increased traffic. As a percentage of total domestic revenue, online revenue increased to 15.4% versus an increase to 13.6% last year.

On June 11, CEO Hubert Joly transitions to the newly created position of executive chairman. CFO and strategic transformation officer Corie Barry becomes Best Buy’s fifth CEO and first female chief executive.

Joly appears to relish the transition from day-to-day operations to cushy board oversight.

“I am very proud of the seamless transition we have decided to implement, as it reflects positively on our momentum as well as our focus on executive development and succession planning,” Joly said in a statement.

‘Room 37: The Mysterious Death of Johnny Thunders,’ Heartbreakers Concert Coming to Disc From MVD

Two Johnny Thunders rock films, Room 37: The Mysterious Death of Johnny Thunders and Madrid Memory, a concert film featuring The Heartbreakers, are coming to disc from MVD Entertainment Group and Cleopatra Records.

Madrid Memory, streeting on DVD plus CD April 5, features a lost live concert performance from The Heartbreakers’s 1984 reunion world tour that included fellow Dolls Sylvain Sylvain and Jerry Nolan plus Billy Rath. Filmed for TV broadcast at La Edad De Oro in Madrid, Spain, the concert captures performances of songs from throughout Thunders’s career including “Personality Crisis,” “Too Much Junkie Business,” and “Born Too Lose.”

 

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Room 37: The Mysterious Death of Johnny Thunders, arriving on Blu-ray Disc and DVD May 24, is a film based on true events surrounding the mysterious death of the legendary guitarist Thunders. Thunders arrives to New Orleans to begin a new chapter of his life by following a new musical sound, and staying clean from drugs in order to see his kids again. After he settles into the St. Peter’s Guest House Hotel, things go awry. His room is robbed, which contained the last of his money and his only methadone supply. His journey to recovery quickly turns dark when he takes desperate measures to get better, all which propel him deeper into chaos, ultimately leading to his unexplained mysterious final hours.

U.K. Home Entertainment Retailer HMV Files Second Bankruptcy in Six Years

Citing “unsustainable” market conditions in the face of declining package media retail, venerable United Kingdom home entertainment retailer HMV filed to appoint administrators (a form of bankruptcy) at the end of December – the second time in the past six years.

Specifically, HMV (His Master’s Voice) said sales of DVD movies and TV shows declined 30% over the Christmas holiday period compared to the previous-year period.

“HMV has clearly not been insulated from the general malaise of the U.K. High Street,” chairman Paul McGowan said in a statement. “Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing U.K. retailers over the last 12 months on top of such a dramatic change in consumer behavior in the entertainment market.”

The 97-year-old retailer operates 125 stores and employs more than 2,000 people, accounted for 31% of all U.K. music CDs sales, in addition to 23% of all DVD/Blu-ray Disc sales in 2018.

“It is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital services,” McGowan said.

Indeed, the U.K. continues to see burgeoning growth in Netflix and Amazon Prime Video subscribers at the expense of pay-TV. Ofcom, the U.K.’s communications regulator, last summer reported that over-the-top video (15.4 million) for the first time surpassed pay-TV (15.1 million) in subscribers.

“The switch to digital has accelerated dramatically this year creating a void that we are no longer able to bridge,” McGowen said.

‘Sheryl Crow — Live at the Capitol Theatre’ Coming on Disc Nov. 9 from MVD

Sheryl Crow — Live at the Capitol Theatre will come out on DVD (plus two CDs) and Blu-ray (plus two CDs) Nov. 9 from Rock Fuel Media and MVD Entertainment Group.

On Nov. 10, 2017, at the historic Capitol Theatre in Port Chester, NY, Sheryl Crow played the final night of her “Be Myself” tour.  The concert features songs from that album, including “Halfway There,” as well as her classic hits, including “All I Wanna Do,” “Leaving Las Vegas ,” “First Cut Is the Deepest,” “Soak Up the Sun,” “If It Makes You Happy” and more.

The performance was captured with 18 4K cameras placed throughout the venue and mixed in 5.1 surround sound.

“Very rarely, you walk into a venue and deeply feel the musical history of the place,” said Crow in a statement. “The Capitol Theatre in Port Chester, New York, is one of those places, with so many legendary shows by artists like The Grateful Dead, Eric Clapton, The Allman Brothers…. Their imprint resonates. The vibe really elevated our performance — my band goes out and kills every night, but this set was on another level entirely. I’m so glad we were able to capture this show on film, it was one of those really special nights.”

The package includes a bonus vintage black and white flashback introduction of many legends who have graced the Capitol Theatre stage over the years, interspersed with exclusive interview segments with Crow recently filmed at her farm in Nashville.

Best Buy’s Entertainment ‘Switch’

NEWS ANALYSIS – Best Buy has been a go-to retail source for consumer electronics and household appliances – but less so for home entertainment. That changed in 2017.

The Minneapolis, Minn.-based company, which operates about 1,500 stores nationwide, reported a 12.6% increase in same-store entertainment sales through Feb. 3, 2018.

“Comparable sales gain was driven primarily by gaming hardware,” Best Buy said in the fiscal 10Q report.

A notable turnaround from fiscal 2016 (ended Jan. 28, 2017), which saw nearly 14% drop in entertainment sales – driven by declines in sales of video games, music CDs and movie DVDs due to continued industry softness.

Packaged media’s decline at Best Buy has been ongoing for years. CEO Hubert Joly cut back shelf space on DVD and Blu-ray Disc movies shortly after joining the retail chain in 2012.

Billboard earlier this year reported Target would begin selling packaged media on consignment basis instead of buying wholesale from distributors. Best Buy, it said, would phase out packaged music from stores.

So, what prompted Best Buy’s entertainment redux? Long-lost video game manufacturer Nintendo, which jumpstarted its relevance March 3, 2017 with the launch of the Switch platform and related software.

Switch help Nintendo generate $9.2 billion in revenue in 2017 – up 172% from 2016, with Switch hardware accounting for 60% of sales, according to industry data. That compared to 34% of PlayStation hardware revenue for Sony and 26% for Microsoft’s Xbox platform.

“Most remarkable is that Nintendo generated these revenues with hardware and full-game sales only,” video game research firm Newzoo said in a statement.

Indeed, Best Buy saw entertainment revenue top 8% ($3 billion) of domestic revenue, up from 7% ($2.5 billion) in 2016.

“It’s all related to Switch,” said Michael Pachter, media analyst at Wedbush Securities in Los Angeles.