Warner has a corner on vid biz boom

Market jumps 13%, led by studios' 'Potter'

The video industry hasn’t even begun to reap the rewards of the movies sparking the biggest summer in box-office history, but consumer spending on the purchase and rental of DVDs and videocassettes is already up 13.3% to a whopping $8.79 billion in the first half of the year.

Warner Home Video has the top revenue-generating title and three of the top four so far, putting the studio in a dominating market share position almost any way you slice it.

More than $223 million has been spent on video versions of “Harry Potter and the Sorcerer’s Stone” after only a month in stores, with “Training Day” generating $145 million and “Ocean’s Eleven” collecting $131 million, giving Warner a 21% ($1.85 billion) slice of the expanding pie.

According to research from Daily Variety sister publication Video Business combining data from studio sources and VSDA VidTrac, Disney is No. 2 at 16.9% ($1.49 billion).

It had three of the top 10 titles, led by “Atlantis,” which fared far better on video than in theaters but slipped 1.3 percentage points below the studio’s full-year position in 2001 despite another huge video premiere animated movie in “Cinderella II: Dreams Come True,” which generated $127 million.

Growing family

Gordon Ho, VP of marketing at Disney’s Buena Vista Home Entertainment, said the good news for the entire industry is that families are embracing DVD, with that segment of the market growing 95% compared with 60% growth for non-family titles.

He said the overall growth in the first half is further indication that homevideo is a year-round business.

With its Jan. 2 release of “The Fast and the Furious” making an impressive run to second place with $196 million, Universal had the third largest market share with 15% ($1.32 billion), off 1.8 percentage points from its record-setting year in 2001.

Although the gap between Warner and other studios in DVD sales is still so large that there really is no race there, Warner’s share slipped a bit from 24.4% to 24%. U is a distant second at 15.2% and Disney dropped to third at 14.9%.

But Warner will gladly concede a little market share in the fastest-growing segment of the market. Despite the less than half-point decline, Warner generated nearly twice as much revenue from DVD sales as in the same period last year — $732 million vs. $414 million in 2001 — thanks to an enormous 79.9% increase in the category overall.

DVD sales beat VHS

In the first six months this year, DVD sales surged past VHS sales for the first time, with the $3.1 billion in DVD sales representing more than two-thirds of all consumer spending on the purchase of movies on homevideo.

Warner’s “Harry Potter and the Sorcerer’s Stone” was the top-selling title on both DVD and VHS. That gave the studio the top market share positions in overall sales with $1.1 billion. Overall sales grew 32.6% to $4.6 billion even as spending on videocassettes declined 12.7% to $1.55 billion.

VHS sales is the one remaining category that Disney is still leading even though it dropped two points on a $100 million decline in spending on its videocassettes. Studio did it with volume, landing seven titles among the 10 bestselling videocassettes of the first six months. That led Disney to a 27.5% share of the market segment with $425 million.

DVD rental revenue also increased significantly to $1.3 billion — a 116% burst — although consumers still spend more than twice as much renting movies on videocassette — $2.9 billion in the first half of the year. But that VHS mark was off a dramatic 21.7% from the $3.7 billion in the same period last year, according to VSDA VidTrac, lowering overall rental revenue 2.4%.

With the top DVD renter in “Training Day,” Warner was the market share leader in DVD rentals, VHS rentals and overall rentals with the studio’s titles generating $749 million, representing 17.8% of all rental fees.

Fox’s “Don’t Say a Word” was the top rental title overall with more than $76 million, followed by “Training Day” with more than $71 million and “The Fast and the Furious” with more than $65 million.

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