Though people bought fewer tickets to movie theaters last year and spent less money at the box office, they greatly increased their spending on DVDs, and the emergence of TV series and miniseries on DVD further pumped the biz.
Revenue from the purchase and rental of DVDs increased more than 40% to $16.3 billion, according to research by Variety sister publication Video Business. The average household with a DVD player bought 16.5 DVDs in 2003.
That pushed overall spending on homevideo (videocassettes and DVDs) to $22.2 billion, a 9.3% increase over 2002.
With less than $30 million separating their revenues for the year — about $4.5 billion each — Warner and Disney were virtually tied for the highest percentage share of the combined homevideo markets.
Disney made big gains over last year with a string of DVD releases that included the two biggest animated movies of all time (“The Lion King” and “Finding Nemo”) and the two biggest theatrical hits of 2003 (“Nemo” and “Pirates of the Caribbean”). The Mouse House edged Warner in overall sales, with a commanding lead in the videocassette market.
Those Disney releases, among others, gave the studio its biggest fourth quarter ever and helped it gain about two marketshare points and nearly $800 million over 2002.
“We spent the bulk of the fourth quarter chasing reorders,” said Buena Vista Home Entertainment president Bob Chapek.
Warners continued to be the front-runner in the high-growth DVD sales segment of the market, mixing its own hits, such as “My Big Fat Greek Wedding”; the “Lord of the Rings,” “Harry Potter” and “Matrix” franchises; TV series such as “The Sopranos,” “Sex and the City” and “Friends”; and a stream of classic films from its enormous library. Warner also had a slight edge in the rental market, despite having only two of the top 10 titles: fifth-place “Wedding” from HBO ($74.3 million) and 10th-ranked “Two Weeks Notice” ($62.1 million).
Comedies rank higher
For the first time, romantic comedies such as “Wedding” and “Sweet Home Alabama” and a straight comedy, “Bruce Almighty,” ranked among the top 10 homevid moneymakers for the year. The list had previously been dominated by action films and family movies.
Seven titles earned more than $200 million. “Nemo” and “Lord of the Rings” generated even more spending on homevideo — $431 million and $343.7 million, respectively — than in theaters.
Even the dramatic thriller “Signs,” with $202 million, was a somewhat new kind of film to do well on DVD as the result of the broadening market.
The Digital Entertainment Group will report this week that another 33.7 million DVD players were shipped into the marketplace in 2003, bringing the total since 1997 to more than 90 million. And another 1.02 billion DVD titles were shipped to dealers, bringing that total to nearly 2.4 billion.
That widening of the audience is reflected in stronger sales for dramas as well. “Seabiscuit” sold more than 7 million copies, a number usually achieved only by movies skewed to young male audiences and kids.TV category grows
The growing number of DVD owners also expanded the revenue stream for TV series and miniseries on DVD. More than $610 million in new money for those titles boosted the overall TV category to more than $1 billion.
“The biggest trend in 2003 was the fast growth of the TV business outpacing overall growth of the category,” said Ron Sanders, Warner Home Video executive VP and general manager.
While the first two seasons of the canceled Fox series “The Family Guy” was the top seller in terms of units (leading to talk of reviving the series), the pricier set of HBO’s “Band of Brothers” was the top TV moneymaker, with $44 million.
“The success of ‘Family Guy’ is something that could have only happened in the DVD era,” said Fox Video president Mike Dunn. “You’ve got a voracious core audience being given exactly what they want.”
Catalog titles also performed well, with Paramount’s trilogy of Indiana Jones movies generating more than $155 million.
Universal’s “Scarface” was also among the top sellers. It sold about as many copies as “Terminator 3: Rise of the Machines,” whose sales of about 4 million copies were considered a disappointment for a movie that generated a respectable $150 million at the box office.
Universal had the top two rental titles: “The Bourne Identity” ($79.2 million) and “Catch Me if You Can” ($75.5 million).
VHS in decline
The VHS market continued to decline, leaving many studios drastically cutting back or eliminating entirely the movies they release on videocassette.
“All of us are in a very cautious mode in terms of what inventory to build for VHS,” said MGM Home Entertainment president David Bishop. “I don’t expect it to be around in three or four years.”
With most of its major theatrical releases bunched in the first half of the year, DreamWorks Home Entertainment surpassed $1 billion in consumer spending for the first time (a 47% increase over 2002), led by “Catch Me if You Can,” “The Ring” and “Old School.”
Jennifer Netherby is a reporter for Variety sister publication Video Business.