“Pirates of the Caribbean: Dead Man’s Chest,” the top-performing DVD of 2006, along with one of the strongest theatrical slates in years, helped steer the vid biz through calm — i.e., flat — waters last year.
None of the top-selling discs in ’06 set sales records, but consumers bought more DVDs overall in 2006 than ever before.
Overall, U.S. consumers spent $23.6 billion renting and buying movies in 2006, a .5% increase from 2005, according to Video Business research. And all sectors — from new release to catalog to TV DVD — saw gains.
Consumer spending on DVD purchases rose 4.6% to about $15.65 billion. Overall sales, including VHS, grew a more modest 1.4% to $15.91 billion.
The rental business rebounded, with DVD rental spending spiking 10.3% in 2006 to $7.39 billion, according to Rentrak Home Video Essentials.
However, the cratering VHS format continued to drag the numbers down. The overall tape rental biz slipped 1.5% to $7.67 billion for the year.
Disney became the first studio to have the three top DVD sellers in a given year. The “Pirates” sequel pulled in more than $293 million in sales and rental revenue, nearly equaling the $299 million that the original staked in 2003.
“The Chronicles of Narnia: The Lion, the Witch and the Wardrobe” came in a close second, taking in $282 million, followed by “Cars” at No. 3 with $269 million.
“I couldn’t say we went into the year expecting that,” says Disney North America homevid G.M. Lori MacPherson. “It’s a fantastic outcome.”
“The quality of movies coming out of box office were better than a year ago,” adds Fox exec VP and general manager Simon Swart.
Overall spending dipped in the first quarter of ’06, but the period also marked the debut of some of the biggest disc performers of the year.
Four of the top 10 video performers — “Harry Potter and the Goblet of Fire,” “Chronicles of Narnia,” “Walk the Line” and “King Kong” — debuted in the first half.
Released in January ’06, New Line’s “Wedding Crashers” was the first to catch fire, and it continued selling throughout the year even as it moved into the catalog category.
“It’s had terrific legs,” says New Line prexy and chief operating officer Stephen Einhorn.
After a few slow months in the summer, sales picked up again in the fall with new release sales up 6% in the fourth quarter.
“Certainly, I think that as we came into the back half of the year, a tremendous slate of motion pictures came into the marketplace,” says Kelley Avery, Par’s worldwide home entertainment prexy. Paramount distributed DreamWorks’ “Over the Hedge,” which was the fifth-biggest DVD seller for the year.
Strong sales of “Walk the Line” at the start of the year and a broad fourth-quarter slate that included “Ice Age 2: The Meltdown,” “X-Men: The Last Stand,” “The Devil Wears Prada” and “Little Miss Sunshine” boosted Fox to No. 3 in market share for the year, moving up a notch from ’05.
Sony saw a 53% increase in new release revenues, led by its top sellers “The Da Vinci Code” and “Talladega Nights: The Ballad of Ricky Bobby.”
“We have a very solid base with DVD,” says David Bishop, Sony worldwide president of homevid. “We have a consumer who’s still very interested in the category.”
Lionsgate’s new release sales were up 20%, led by strong sales on sequels “Saw II” and “Tyler Perry’s Madea’s Family Reunion.”
“We had an even more robust theatrical release schedule in the past calendar year than in 2005, and we’re anticipating it will be dramatically higher this year,” says Lionsgate prexy Steve Beeks.
It wasn’t only new releases that were gaining. Nearly every studio reported rises in catalog sales.
Warner Home Video, which held safely onto its No. 1 market-share spot due to its huge catalog perf, reported sales were up on low-priced library movies and new special editions, as well as multidisc sets like its 14-disc “Superman” collection.
“There was some worry that there was a race to the bottom in low-priced/value DVD,” Warner prexy Ron Sanders notes. “We’re seeing very good numbers in high-price disc and multifilm sets. Low-price and high-price (catalog DVD) are both showing strength.”
TV DVD catalog also was strong as consumers continued to buy box sets that had been in release for some time.
In the direct-to-video category, sales picked up as studios began pumping out the first wave of bigger-budget, higher-profile films in that market.
Universal’s springtime release of “King Kong,” the sixth-biggest DVD seller of the year, led the studio’s slate. But U was also aggressive in growing its DVD originals business in 2006, with successful releases of “Bring It on Again” and “American Pie Presents: Band Camp,” which each pulled in more than $25 million.
“It’s clear that everyone is in pursuit of new content and that DVD originals is a perfect solution,” says Universal homevideo president Craig Kornblau.
The sell-through market was somewhat tougher internationally in 2006 than it was in the U.S.
Internationally, consumer sales fell 4.8% to $16.27 billion, according to Media Control GfK Intl.
Media Control U.S. prexy Amy Heller says that in terms of units sold, the international market was essentially flat, with the drop in dollar value due partially to price declines, particularly in the U.K. Unit sales in the U.K., one of the largest homevid markets outside the U.S., grew 3% during the year, but dollar value dropped by 6%.