VIDEO : Longform Music Packages: The New Kids on Block : Though still a small segment of the business, sales are rising because of lower prices, better VCRs and smarter marketing.

Longform music videos, the 30- to 60-minutes packages sold in video outlets, are a growing segment of the home video business.

Music video revenues still account for less than 2% of the business, but they are growing--from $150 million in 1989 to $180 million in 1990, according to Dick Kelly, a home-video industry analyst with Cambridge Associates. His projection for this year is $210 million.

Retailing for $13 to $20, some of the videos by artists such as Madonna, Michael Jackson, New Kids on the Block and Janet Jackson are compilations of MTV-oriented clips, often with added interview footage. Others are original productions, sometimes costing as much as $1 million to make.

Among the reasons for the increased business are lower prices, better VCRs and smarter marketing--offering them for sale in record stores, particularly chains such as Tower and Wherehouse.

“The big thing was putting the videos in stores where music fans--the big target market--could find them,” said Stuart Hersch, president of the music-video company A Vision Entertainment, a unit of Time Warner Co. that primarily releases Atlantic Records artists.

Five years ago, the primary outlet was the traditional video store. But most store owners gave music videos only minimal shelf space, preferring to stock movie cassettes that are more popular with renters. That hasn’t changed: Hersch estimated that the standard video store handles only about 20% of the music-video business, and Ron Castell, senior vice president of Blockbuster, the nation’s largest video chain, said that music videos make up less than 1% of his company’s business.

Record stores proved to be a better outlet--and an increasingly willing one, noted Debbie Newman, vice president of SMV Enterprises, the music-video industry’s largest company.

“With vinyl being phased out of record stores in the last few years,” she said, “they have more space to stock music videos, since audio tapes and CDs don’t take up as much space as records did.”

Another reason for the increase is the drop in price in recent years. Back in the mid-’80s, music videos often cost $30 to $40. Now the price is less than $20, with many discounted so low that they’re equal in price to CDs.

John Thrasher, vice president of Tower Video, cited the new generation of VCRs as another factor in the growth of the music video business. “The older machines that didn’t play stereo are being replaced by new stereo machines,” he explained. “The sound delivered by stereo VCRs is much better--so fans are likely to want to watch music programs on their VCRs.”

An indication that music videos are growing is that over the past two years, most record companies have created divisions devoted exclusively to their sale and marketing. SMV Enterprises, for instance, is a division of Sony Music.

A frequent criticism of the music-video business is that the videos often are released many months after the artist’s album. Some argue that the video and the album should be marketed simultaneously.

“In most cases, that’s not a smart thing,” SMV’s Newman countered. “We only put out videos of proven artists, taking advantage of their popularity. Why put out a video on a brand new artist? Or what if an artist puts out an album that doesn’t sell? If the video came out at the same time, that probably wouldn’t sell either.”

The newest thing in the music-video business, thanks to Madonna, is the video single, which is a lone music clip that sells for less than $10. Her “Justify My Love,” the first video single, has been a best-seller since it came out about two months ago (currently No. 5 on Billboard’s chart). Just out is Whitney Houston’s “The Star-Spangled Banner,” a $7.98 video of her acclaimed performance of the national anthem at the Super Bowl.