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The Kid Factor: Driving DVD Sales and Rental Growth

27 Jan, 2005 By: Judith M., Melinda S.

Kids are growing up in homes with computers, high-speed Internet access, downloading capability, multi-DVD playback capability and much more. That makes households with kids some of the most connected households in the nation.

The kid factor greatly increases the likelihood of DVD, PC and game ownership in households, according to Home Media Research's 2004 Consumer Study. According to the study, 95 percent of households with kids under the age of 13 have at least one DVD player, while more than three-fourths have additional DVD playback devices.

DVDs have become a staple in households with children, making them a key driver in the DVD economy. In the past year, 84 percent of households with kids under the age of 13 had bought a DVD, while 78 percent had rented a disc. By comparison, 77 percent of all DVD households had bought a disc, while 69 percent had rented one.

Families buy discs primarily from discounters such as Wal-Mart, Target Stores or Costco. Nearly three-fourths of households with kids under 13 chose discounters and warehouses as their primary DVD purchase destination. Consumers with kids are nearly twice as likely to rent at Blockbuster as from any other place, with 46 percent saying Big Blue is their primary rental destination.

Buy rates remain robust for consumers with kids. In the past year, nearly half of all households with kids under the age of 13 bought at least one disc a month, according to the study. Nearly 60 percent said they were buying more DVDs than they were a year ago, 35 percent said they were buying the same amount, and only 7 percent said they were buying fewer.

Family-friendly fare tops the list of what consumers with kids are buying. DreamWorks Home Entertainment's Shrek 2 was high on the list of must-have DVDs for kids. The sequel racked up nearly $500 million in video sales in 2004, showing the incredible economic power of the family on packaged entertainment. Another winner for the year was Warner Home Video's Harry Potter and the Prisoner of Azkaban. The third installment based on the books by J.K. Rawlings generated $264.6 million in video sales for the year.

Households with kids also are heavy renters. Nearly one-third said they rent discs at least once a week. While 42 percent said they were renting more DVDs than they had a year ago, 37 percent said they were renting the same amount and 21 percent said they were renting less.

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