ROME — Though late taking off, Italy’s homevideo market is flying high.Billings last year for rental and sell-through were a combined $ 700 million, making the country the biggest Euro market after the U.K. and Germany. Tradesters expect the figure to grow by 10% this year. Sell-through, which increased 25% in 1992, is growing faster than rental, fueled by kidtoons and Disney titles like “Fantasia” and “Beauty and the Beast.” Pirate cassettes of “Snow White” sell like hotcakes. The theory is that, with Italy having one of the world’s lowest birth rates, parents are lavishing more and more care (in the form of vids) on their fewer and fewer sprigs. Each Italian family spends an average of $ 95 a year on tapes; $ 70 of that is on sell-through items, way above the $ 38 Euro average. Even the Brits spend only $ 55 average on sell-through, out of a total spend of $ 105. Penta leads the rental market, followed by RCA/Columbia, Warner and CIC (Paramount/Universal). In sell-through, Disney is the heavyweight champ, with a strong contender in RCS Video with its Vivivideo, Panarecord and Club del Video labels. Some 54% of TV homes are expected to own a VCR by early next year, according to industry estimates. In 1988, the figure was a mere 14%. Specialized vidshops, mostly small family-owned concerns, are still the favored outlets. Big chains like Blockbuster are unknown here, though retail outlets like Standa and Rinascente are starting to include homevid sections. Record stores and supermarkets also have increasingly well-stocked vid sections. Neighborhood newsstands remain one of the most popular places to pick up a video, especially docus and porn titles. Piracy is still a major problem, with Italy accounting for the biggest losses in Europe. Though police regularly raid duplicating centers, legislation is soft; convicted pirates are rarely sentenced. Estimates of the piracy rate vary widely, from 15% by the Italian Copyright Assn. to 45% by RCA/Col chief Francesco Fanti. Speaking at last fall’s Venice festival, Motion Picture Export Assn. of America topper Jack Valenti claimed that half of the cassettes circulating here were illegally duped.