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TV DVD Market Reaching Saturation? New Report Says Hell No

7 Oct, 2004 By: Thomas K. Arnold

On the eve of Video Store Magazine's second annual TV DVD Conference comes a new research report from Merrill Lynch that predicts a 30 percent annual growth rate for TV DVD over the next four years.

Jessica Reif Cohen, one of the Wall Street analysts the Hollywood studios respect the most, predicts consumer spending on TV DVD product will rise from a projected $2.3 billion this year to $3.9 billion in 2008.

Overall U.S. DVD spending, she predicts, will reach a record $16.5 billion, with TV DVD's cut a healthy 14 percent.

That's all well and good, but the real promising news in the analyst's report is her contention that “TV DVD is a new high-growth category that does not cannibalize other operating segments.” She believes TV DVD will be a “significant contributor” to studio growth for at least three more years, with international markets likely to benefit for at least five years.

I hope TV executives are reading this. I can only imagine what they were thinking in recent months, as retailers around the country began significantly expanding their TV DVD footprint — as what had still been considered by some as a novelty began showed signs of becoming a viable and long-lasting business.

“It's going to hurt viewership.”

“It's going to kill syndication.”

“How can we get a piece of it?”

The first two fears are groundless, I am convinced — particularly for newer shows still on the air. TV DVDs of, say, “24” let people catch up with past seasons and episodes they might have missed and probably generate even more anticipation and demand. If you missed a show or two, no need to drop out — just keep watching and then fill in the gaps when the DVD comes out.

The DVD sets also broaden the audience, I would assume. My wife never watched “Alias” until I brought home Season One after our first TV DVD conference in October 2003.

Now, she's hooked — both to the weekly series and to the Season Two and Season Three DVD boxed sets.

I also don't see TV DVD hurting syndication. Old sitcoms, in particular, are great late-night or casual viewing, especially those marathons on Nickelodeon and TV Land. If you see one you really like, you'll pick up what's available on DVD, but sometimes it's still fun to just plop yourself in front of the TV and channel surf until you find something you like.

If anything, syndication is going to act as an infomercial for the classic TV sets that are out on DVD. Again, my kids fell in love with “The Munsters” by watching reruns on TV; now they can't wait to dig into the DVD collection. But that hasn't prompted them to tune out of Nick at Night; to the contrary, they're more eager than ever to check the channel out just to see what other cool old shows they might now know about.

The only fear that is viable is No. 3. But hey, we can't have everything!

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