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DVD Dollar Derby for Home Video Biz
HOLLYWOOD (Variety) – Not bad for an “ancillary” business: last year, DVDs helped drive the domestic video industry to a monstrous $20.3 billion.
Consumers spent $12.1 billion to buy movies on DVD or VHS, and $8.2 billion more renting them.
Total spending was up 11.5%. Combined with theatrical ticket purchases, consumers spent more than $30 billion buying, renting, and going to see movies in 2002, making it one of the largest business sectors and certainly one of the highest growth areas in an otherwise moribund economy. (The $12.1 billion spent on the purchase of videos exceeds the record-setting amount spent on the movie theater tickets last year.)
Purchases of DVDs grew 52.6% to $8.7 billion. The growth in rentals was even more astonishing — 106% to $2.9 billion. In comparison, $3.7 billion was spent buying videocassettes, $5.3 billion renting.
While DVD sparked a 23.5% growth in sales, that new interest in purchasing movies led to a decline in rentals, which were down 3% overall to $8.2 billion, with 144 million fewer copies rented, according to VSDA VidTrac.
Warner Home Video easily dominated, with its 21.7% share of the sales-and-rental market. The public spent $4.4 billion on Warner titles (which include New Line Home Video releases), according to Daily Variety sister publication Video Business.
Warner was the leader in nearly every category including DVD sales and rentals (though it was runner-up to Disney in VHS sales).
Disney, which also distributes Miramax and Dimension videos, was a strong second overall — $3.7 billion and 18.2% of the market — and was runner-up in most categories. While Warner was leading the charge to lower prices, more sales and fewer rentals, the Mouse House stuck to its strategy of higher pricing and more profitability as it enjoyed a huge surge in the purchase of family movies on DVD. The studio had a 40% share of the family market (which experienced a huge growth of 94% last year to $2.3 billion).
Disney executives said their titles generally earn more in video sell-through than from box office. For instance, Disney’s “Atlantis: The Lost Empire” earned $84.1 million at the box office but $130 million from video (6.1 million copies on video and DVD). Disney says its video-to-box office ratio is 60% higher than at other studios.
By comparison, Warner’s “Scooby-Doo” collared $153.3 million at the box office, but earned $118 million in video (selling 6.8 million copies).
Still, a few other titles found greater success on video than at the box office. DreamWorks’ “Spirit: Stallion of the Cimarron,” earned $73.2 million at the box office but generated sales of $100 million on video (with sales of nearly 6 million units) via video distributor Universal.
The top title of 2002 was Disney’s “Monsters, Inc.” — consumers spent $384.8 million renting and buying DVD and VHS editions (21 million copies were sold). Impressive as that is, it doesn’t match the 24 million units that DreamWorks’ “Shrek” sold in 2001.
Ranking second and fourth, respectively, were 2001 titans “The Lord of the Rings: The Fellowship of the Ring” and “Harry Potter and the Sorcerer’s Stone.” They raked in $380.1 million and $343.88 million for New Line and Warner, respectively.
Columbia TriStar’s Halloween release “Spider-Man” was the third-biggest title of the year as consumers spent $348 million on DVD and VHS versions of the movie. Still, the title won’t meet the company’s exceedingly high hopes — the studio shipped a record 27 million copies of the biggest box office hit of the year and 17.5 million have been purchased so far.
Without any distributed labels like New Line, DreamWorks or Miramax to help overall market share, Fox ran close to Universal on the strength of two theatrical hits, “Star Wars: Episode II — Attack of the Clones” and “Ice Age.” The two ran neck and neck, each generating in excess of $200 million on video.
Top rental titles last year include Fox’s “Don’t Say a Word,” with $83.97 million in total rental spending for DVD and VHS versions, followed by Warner’s “Ocean’s Eleven” ($82.2 million), “Training Day” ($79.5 million) and “The Fast and the Furious” ($70.71 million).