As entertainment retail hits the home stretch during the winter holiday sales period, Walmart quietly remains an industry leader.
In an era of declining packaged media sales, the nation’s largest retailer continues to spearhead the market for DVD and Blu-ray Disc movies simply by continuing to devote significant retail space to content, including point-of-purchase displays and ubiquitous dump bins.
Walmart has always appealed to rural shoppers, geographical areas that resonate among packaged media consumers.
“We still sell a lot of DVDs at Walmart,” Thomas Hughes, EVP of worldwide TV & digital distribution at Lionsgate, told attendees Dec. 11 at the Parks Associates’ “Future of Video” confab in Marina del Rey, Calif. “We’re on the coasts, so we don’t see it. But other people still buy DVDs.”
While Walmart doesn’t reveal sales data for specific product categories, it does expect to report 3% increase in same-store sales for the fiscal year ending in January.
In the most recent fiscal period (ended Oct. 26), Walmart reported a low single-digit sales increase for general merchandise, which includes packaged media.
“We delivered solid sales results across most categories in the quarter,” was all Walmart would say on the matter.
To be sure, revenue from DVD movies pales in comparison to the heady days of home video more than 10 years ago when studios regularly touted first-day sales of new releases and home entertainment studio revenue trumped the box office.
Indeed, sales of discs declined nearly 15% to $2.79 billion in the third-quarter (ended Sept. 30) compared to the previous-year period, according to DEG: The Digital Entertainment Group.
But big box retailers such as Walmart, Target and Best Buy understand turning a cold shoulder to DVD leaves billions in potential revenue for ecommerce behemoth Amazon and others.
At the Walmart Supercenter in Travelers Rest, S.C., the entertainment section included requisite links between packaged media and Walmart-owned Vudu.com – which sells and rents digital content.
But a picked-through, shrewdly-placed POP display of “bestsellers” Blu-ray and DVD titles underscored whether consumers still buy packaged media.
“You’d be surprised,” said the entertainment section employee. “It’s the holidays, people want DVDs in their Christmas stockings.”
MERCHANDISING — Barnes & Noble is currently running its annual sale on Criterion Collection DVDs and Blu-rays through Dec. 3. Fans can get Criterion titles for 50% off from the bookseller’s movie and music section.
Target also offered an interesting deal for the week of Nov. 27, offering a free $5 gift card with the purchase of both the DVD/Blu-ray and original book for either Warner’s Crazy Rich Asians or HBO’s Sharp Objects.
Home entertainment content has never been cheaper — or easier to get.
Over the Black Friday holiday weekend, consumers can buy DVDs for less than $2 at Walmart. They can purchase Blu-ray Discs for less than $4 at Walmart, Target and Best Buy.
And, for those who’d rather stay home and not brave the crowds, they can rent some movies for as little as 99 cents at Redbox and Google Play, buy movies digitally for as little as $4.99 at Google Play, or purchase a broad selection of recent hits, from A Quiet Place to Sicario: Day of the Soldado, at Redbox or FandangoNOW for under $10.
At Walmart – which was open all day on Thanksgiving – Black Friday prices went into effect at 2 p.m. the day before, on Wednesday, Nov. 21.
The first taste of home entertainment in the giant retailer’s 36-page mailer comes on page 7, with a Walmart digital Vudu Card with Mission: Impossible – Fallout available for $7.96, $12 off the regular price.
On the same page, Walmart is promoting an LG “smart” Blu-ray Disc player for $49, which includes $10 in Vudu credit.
DVDs and Blu-ray Discs don’t get called out until page 11, with Walmart promising more than 110 different DVD movies for $1.96, including Ice Age: Collision Course, The Peanuts Movie and The Wizard of Oz.
Walmart also is offering more than 180 DVDs and Blu-ray Discs for $3.96, including Home Alone, Fast & Furious 8, and How the Grinch Stole Christmas (the live-action one, with Jim Carrey); 50 at $5.96 (including Ice Age, Justice League and the Deadpool 2 DVD); 30 at $7.96 (including the Deadpool 2 Blu-ray Disc); 50 at $8.96 and 90 at $9.96.
Walmart also is offering Xbox and PlayStation 4 games for as low as $12.
Target Stores’ mailer prominently advertises the hot new video game Call Duty: Black Ops 4, which came out Oct. 12, for $45. Stores opened on Thanksgiving Day at 5 p.m., but Black Friday pricing went into effect at 6 p.m. the day before, on Wednesday, Nov. 21.
The retailer’s big “Doorbuster” is a Sony PS4 console, bundled with the new Spider-Man game and one wireless controller, for $199.99
Movies start on page 15 of the 47-page flier, with the whole top half of the page devoted to $4 DVDs and Blu-ray Discs, including Deadpool, Bad Moms, Ocean’s 8, The Greatest Showman and Jurassic World: Fallen Kingdom (all on DVD only) as well as Blu-ray Discs of The Peanuts Movie, Smurfs: The Lost Village and The LEGO Batman Movie.
Target also is selling an assortment of discs for $6 (Bad Moms, Justice League, Wonder Woman, Peter Rabbit, Paddington 2, all on Blu-ray Disc), as well as another batch at $9 (including 4K Ultra HD Blu-ray editions of Deadpool, Jumanji: Welcome to the Jungle, Spider-Man: Homecoming, The Hitman’s Bodyguard and Pacific Rim).
Also available at Target come 5 p.m. Nov. 22 are $10 season sets of TV series like “The Walking Head,” “The Handmaid’s Tale,” Supernatural” and “Westworld.”
At Best Buy, stores also opened on Thanksgiving Day at 5 p.m. and, like Target, Black Friday prices have been in effect since Nov. 21 at 6 p.m.
Right on page one of the retailer’s 52-page mailer is an ad for $6.99 Blu-ray Disc/DVD combo packs of Avengers: Infinity War, Black Panther, Coco and Deadpool 2. “These Deals are Blockbusters,” the headline reads.
Inside are ads for games at $19.99 to $29.99 and $14.99 and under.
Hot new releases Red Dead Redemption 2 and Fallout 76 are not discounted ($59.99), but come with collectible freebies: a collapsible cup for Red Dead Redemption and a Vault Boy keychain for Fallout 76.
Call of Duty: Black Ops 4 is available for $44.99, a penny less than at Target,
Best Buy also is advertising 55 4K Ultra HD Blu-ray Disc titles at $14.99 each, including Ant-Man and The Wasp, Avengers: Infinity War, Deadpool 2, Jurassic World: Fallen Kingdom, Coco, Black Panther and Skycraper.
On the next pages are 75 Blu-ray Discs at $3.99 each, including Wonder Woman, Jurassic World, Dawn of the Planet of the Apes, and Kingsman: The Secret Service; 70 at $5.99, including Ready Player One, It, Tag, The Darkest Minds, and Dunkirk; 50 at $7.99, including The Death of Superman, Overboard, Deadpool 2 and Uncle Drew; and 35 at $9.99, including Justice League, Jumani: Welcome to the Jungle, and Sicario: Day of the Soldado.
Best Buy also is selling more than 20 Ultra HD Blu-ray Disc titles at $7.99 each, including John Wick, American Assassin, Hacksaw Ridge, Hell or High Water, The Hitman’s Bodyguard and Terminator 2: Judgment Day.
Digital retailers are offering movie deals this holiday weekend, as well.
Google Play offered 99 cent rentals on Thanksgiving Day, including such recent releases as Crazy Rich Asians and Incredibles 2, giving consumers something to watch while they enjoy their turkey coma.
It has also slashed prices on digital purchases to as low as $4.99. Among the movies consumers can buy for less than $5 are The Maze Runner, Wrath of the Titans, Now You See Me, Escape Plan 2, A Prayer Before Dawnand Independence Day: Resurgence.
Other “limited time Cyber Week deals” include various recent hit movies for $9.99, including Mamma Mia: Here We Go Again (regular price, $14.99), Spider-Man: Homecoming ($21.99) and Deadpool 2 ($19.99).
Google Play also is offering access to Starz for $5 a month for three months (the regular price is $8.99 per month).
Redbox is offering deals on numerous digital purchases, including such recent releases as A Quiet Place (cut to $7.99 from $14.99), Sicario: Day of the Soldado (at $9.99 from $18.99), Rampage (at $9.99 from $19.99) and Uncle Drew (at $9.99 from $14.99). The rental kiosk company is also offering deals on used discs based on location.
FandangoNow, the on-demand service owned by Fandango, is offering special deals on digital purchases as well, with such new releases as Deadpool 2, Rampage, A Quiet Place, Daddy’s Home 2 and Ready Player Oneat under $10.
FandangoNow also is offering consumers $8 toward a movie ticket for every $20 they buy on digital purchases or streams.
For consumers who’d rather stream than buy, both Redbox and Google Play are offering 99-cent rentals throughout the holiday weekend.
At Redbox, the selection includes The Other Woman, Playing It Cool, The Girl Next Door and Cast Away.
At Google, 99-cent rentals include a wealth of current hits, including Crazy Rich Asians, The Meg, Incredibles 2, Mile 22, Jurassic World: Fallen Kingdom and Fantastic Beasts and Where to Find Them.
When you rent and sell packaged media in a streaming world, Black Friday (Nov. 22) becomes a mandatory weeklong sales event. Especially for the country’s last-standing brick-and-mortar video rental store.
Family Video, the privately-owned Glenview, Ill.-based chain of more than 700 stores operating in 29 states, launched special deals on DVD and Blu-ray Disc titles (new and used) beginning Nov. 19 through Nov. 26.
With DVDs priced from $4 and Blu-ray priced from $5, Family Video is also offering 4K Ultra HD Blu-ray titles priced from $12.
Even better: You don’t have to live in the Midwest or South to partake in the sale. FamilyVideo.com will ship (U.S. Postal) for free on any size order through Dec. 16.
The news caught the attention of local NBC television affiliate WYFF4 in Greenville, S.C., which sent an incredulous news crew (“People still go to the video store?”) to a Family Video location in Mauldin to document.
Said one customer, “Man, I haven’t been to a store like this in 10 years. I had to Google why does Family Video even exist?”
And with good reason.
Packaged-media rental revenue from brick-and-mortar stores dropped more than 18% in the third quarter to $71.5 million compared to $87.5 million in the previous-year period, according to DEG: The Digital Entertainment Group. The tally is down almost 34% from the first three months of 2017.
As Black Friday approaches even big box retailers such as Target are feeling the heat from over-the-top video. Circling a freestanding point-of-purchase display of discounted animated winter holiday DVDs near the gift cards at a Target in Greer, S.C., a mother and her young kids scanned the titles – on her cell phone.
“No, I think Hulu has that,” said the mom, who left empty-handed.
In a shot across the bow at online behemoth Amazon, Target Corp. announced it will offer free two-day shipping on hundreds of thousands of items with no minimum purchase and no membership requirement beginning Nov. 1.
Free two-day shipping had previously only been available to customers who spent $35 or used a REDcard.
The chain also announced it will be the first retailer to offer same-day delivery and drive up service coast to coast.
“We want to make the busy holiday season easier for our guests so they can spend more time with their family and friends,” said Target CEO Brian Cornell in a statement. “From same-day delivery with Shipt, drive up, free two-day Shipping and more, no other retailer can match the convenient delivery options that Target will offer this season. When you combine these services with our incredible assortment of exclusive brands, everyday low prices and skilled team, I’m confident Target will be America’s easiest and most enjoyable place to shop for the holidays and beyond.”
During peak periods, if free two-day shipping is not available, Target will offer guests free standard shipping, the company announced. The retailer will offer guests free shipping through Dec. 22.
Consumers in markets across 46 states can have items delivered to their doorstep in as little as one hour with Shipt, Target announced. Guests place an order through the Shipt app or Shipt.com and choose from more than 55,000 Target products. Then, Shipt shoppers can head to a local Target store to complete the order and deliver it to the guest’s door.
The retailer also announced the expansion of its drive-up service to nearly 1,000 stores by the end of October. Customers can place an order in the Target app and have their purchases brought to their car by a team member. Orders are ready within an hour, according to Target, and are delivered to guests’ cars within two minutes of their arrival in the parking lot. Target is making more than 250,000 items available through the service.
Other services, according to Target, include:
order pickup, allowing customers to buy online and pick orders up in store on the same day for free;
Target restock, allowing customers to place orders for basics such as diapers, paper towels and pantry staples by 7 p.m. Monday through Friday and have them delivered the next day for a fee of $2.99 or at no charge for REDcard holders;
and delivery from store, allowing customers to shop in store at select urban locations and have their purchases delivered to their homes that day for a flat fee of $7 (available in Boston, Chicago, New York, San Francisco and Washington, D.C.).
Also for the holiday season, low-cost gifts will be highlighted at up to 30 displays throughout each Target store with canopies and signs, such as “Under $5, $10 or $15.”
In the wake of the Toys ‘R’ Us liquidation, Target is also expanding its toy section for the holidays.
Cameron Douglas, VP of home entertainment for Fandango’s on-demand video streaming service, FandangoNow, has been elected chairman of the Entertainment Merchants Association.
Douglas replaces Jonathan Zepp, head of worldwide movies and TV partnerships for Google Play.
Other officers include vice chair Suyin Lim, senior director, global content acquisition, Sony Interactive Entertainment; secretary Michele Edelman, EVP, marketing and content strategy, Vubiquity; and treasurer Matt Hill, head of vendor management, Amazon Prime Video.
EMA past chairmen Bob Geistman, EVP, sales and marketing for Ingram Entertainment, and Marty Graham, SVP, comScore, as well as Bill Kotzman, partner product manager, TV/film, Google/YouTube, will also serve on the association’s executive committee as at-large members.
Other members of the board are Amit Balan, head of marketing, Vudu; Lori Flynn, VP, content, Redbox Automated Retail; Ryan Gorman, director, merchandise buying, video games, Target; Pedro E. Gutierrez Jr., director, digital stores movies and TV business and category management, Microsoft; Steve Harkins, VP and GM, Baker & Taylor; Bill Miller, VP and divisional merchandise manager, DVD, Blu-ray, and Games, Trans World Entertainment; Jason Peterson, CEO, ContentBridge Systems; and Mark Vrieling, CEO, ScreenPlay Entertainment.
“In the ever-changing world of home entertainment retailing, we need an organized industry association more than ever,” said Douglas in a statement. “EMA collectively advocates for anyone involved in the consumer delivery of content, promotes and encourages adoption of standards, and establishes trade- and consumer-focused best practices. I am proud to devote my time to an organization so important to our industry.”
“The companies on EMA’s Board of Directors represent the spectrum of the home entertainment industry, including video and video games, physical and digital, and sellthrough, rental, and streaming,” said Mark Fisher, EMA president and CEO, in a statement. “These directors personify the diversity of products and business models in our industry and will help ensure that the industry’s trade association meets the needs of all market segments in our incredibly diverse industry.”
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.
Disney ranked high at No. 5, and Netflix, at No. 21, beat out fellow tech giants Google and Apple, ranked Nos. 28 and 29, respectively.
Among mass merchant/consumer electronics retailers, Costco (No. 17) topped Best Buy (No. 46), Target (No. 49) and Walmart (No. 69).
According to Harris, the Reputation Quotient is “technically designed to understand how a company is perceived in modern culture.” The measure takes the top most visible companies (for good or bad reasons) and evaluates them across six dimensions of corporate reputation attributes to arrive at a corporate reputation ranking. If a company is not on the list, it does not necessarily suggest that they have either good or bad reputation, but rather they didn’t reach a critical level of visibility to be measured.
The Weinstein Co., which has been embroiled in executive Harvey Weinstein’s alleged sexual assault scandal, and Takata, with its infamously defective airbags, came in last on the list at Nos. 99 and 100, respectively.
Apple, Disney and YouTube, respectively, ranked as the top three most “intimate” brands among millennials, according to MBLM’s Brand Intimacy 2018 Report, which is the largest study of brands based on emotions. Brand intimacy leverages and strengthens the emotional bonds between a person and a brand.
“We were surprised and pleased to see YouTube as an addition to the top three most intimate brands for millennials this year,” stated Mario Natarelli, managing partner, MBLM. “We believe its rise is due to our culture’s continued need for escape and the brand’s immediate, diverse content, personalities and growing offerings in movies and live TV. YouTube is clearly an established ritual in the lives of many millennials today.”
By comparison, in MBLM’s 2017 report, Disney placed first, followed by Amazon and Netflix.
The other brands that rounded out the top 10 were Target, Amazon, Nintendo, Google, Xbox, Netflix and Whole Foods.
The age group of 18-24-year-olds had a slightly different mix of top companies. The top 10 for that group were Apple, Amazon, YouTube, PlayStation, Starbucks, Nintendo, Google, Netflix, Coca Cola and Walmart.
The report analyzed the responses of 6,000 consumers and 54,000 brand evaluations across 15 industries in the United States, Mexico and the United Arab Emirates. The full report will be released on March 13, 2018.
Big box retailer Target reportedly is planning to sell music CDs and DVDs on a consignment basis – rather than the typical wholesale bulk business model. The retailer would only pay studios for titles sold. Separately, Best Buy is stopping selling CDs this summer.
Citing sources, Billboard reported the national retailers are bowing to ongoing consumers trends away from packaged media and toward digital and subscription streaming services such as Movies Anywhere and Netflix.
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 consumer electronics retail chain in 2012.
Entertainment sales, which include packaged media, generated $509 million (6%) of third-quarter domestic sales – up 4.1% from the previous-year period. The percentage hasn’t changed much over the years.
For Target, the move underscores the retailer’s exit from digital retail three years ago when it shuttered — after 18 months — the Target Ticket platform with more than 30,000 movie and TV titles. At the time, Target transferred all digital consumers to CinemaNow – the digital retail platform once owned by Best Buy.
Target Ticket didn’t survive despite the retailer giving Redcard holders a 5% discount on purchases, excluding rental.
Meanwhile, Target announced that winter holiday sales from November through December grew 3.4% across its core merchandise categories, including home, apparel, food & beverage, hardlines and essentials. Entertainment wasn’t among them.