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EXCLUSIVE RESEARCH: DVD Revenue Registers Triple-Digit Gains

16 May, 2002 By: Melinda Saccone

The home video industry's dramatic transition from VHS to DVD continued apace during April. While the skyrocketing growth of DVD rental revenues for the month could not quite offset the precipitous fall of VHS rental revenues, still the transition is dramatic, as DVD registered triple digit gains in revenues and the digital format continued its conquest of retail floorspace.

Consumer spending at the rental counter ended April in the red, with overall spending declining a slight .5 percent over the comparable four-week period in 2001. April rental receipts totaled $661.3 million compared to $664.9 million last year.

Even though total monthly spending was almost on a par with last year, VHS rentals declined 26 percent over the comparable period in 2001, to $435.4 million, as DVD took hold.

DVD penetration registered 32.6 percent entering the second quarter, according to a study conducted by Video Store Magazine market research. In response to the growing demand for the DVD format, suppliers have responded to the continued growth in DVD by adjusting their inventories to accommodate what consumers want: more DVD.

A survey of the top 100 independent retailers shows that these retailers carry, on average, 44.5 percent of a new release's total inventory in the DVD format, according to Video Store Magazine market research.

April tallies showed 195.2 percent growth in DVD rental revenue over the comparable period last year, with total spending at an impressive $225.8 million.

At month's end, DVD rentals accounted for 34.1 percent of overall spending. By comparison, DVD rentals accounted for just 11.5 percent of overall rentals in the comparable period in 2001.

Meanwhile, in the market share sweepstakes, Universal Studios Home Entertainment continued to dominate at the rental counter, claiming 22.6 percent of all April rentals. Universal, which also distributes DreamWorks Home Entertainment product, owned two of the top five rentals for the month. Leading for the studio was the late March release K-Pax (No. 3), and Spy Game (No. 4).

Warner Home Entertainment wasn't far behind, grabbing 19.9 percent of April transactions. Leading the studio's releases was the Denzel Washington starrer Training Day, which grabbed the No. 2 spot on the top 25 rentals chart for the month.

20th Century Fox Home Entertainment came in third, with 13 percent, and Buena Vista Home Entertainment placed fourth, with 11.4 percent.

MGM Home Entertainment rounded out the top five suppliers for the month, with a 10.8 percent market share and the top-renting title for the month. Bandits, which was released in the first week of April, was consumers' rental of choice for the month.

Comedies continue to be the stronghold at rental, with the genre grabbing 24.5 percent of monthly rentals. Led by Warner's Training Day, actioners took second billing for the month with a 20.9 percent market share.

Rounding out the top five renting genres in April were dramas (No. 3, 18.6 percent), horrors, (No. 4, 11.1 percent) and thrillers (No. 5, 9.2 percent).

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