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TOP 100: Online Leaders Are Way Ahead of the Pack

30 Apr, 2004 By: Holly J. Wagner

The online video world held few surprises in 2003, but it's clear some of the players are angling to move up the list by 2005.

Amazon.com held onto its title as the top online video revenue generator for the year, having established itself early in the Internet revolution as an online powerhouse and a leader in sellthrough video by mail.

It's probably the same early adopter audience that keeps Netflix on top, even as the first online rentailer prepares to expand across borders and offer video-on-demand domestically by next year.

Netflix nearly doubled its subscribers during 2003, putting enough pressure on brick-and-mortar rental chains for the two largest — Blockbuster and Hollywood — to promise that subscription plans would be available nationally by the end of 2004. Netflix had nearly a million and a half subscribers closing out 2003, up from 857,000 subscribers at the end of 2002.

The numbers plummet in Amazon and Netflix's wake: the revenue gap between Netflix and No. 3 Buy.com is more than $200 million — a gap that doubled in 2003.

It's been a long time since the industry saw Blockbuster ranked below No. 1 in any video rental enterprise, but in 2003 the chain admitted having purchased Filmcaddy.com, a Phoenix-based online rental site, as a testbed for online rentals Big Blue plans to offer under its own banner by the end of 2004. The effort brought the top brick-and-mortar chain in at No. 10 on Video Store Magazine Market Research's evaluation of online video revenue generators.

The only other online rentailer to make the list was Wal-Mart, which generates much more video moola online with sellthrough than with its fledgling rental business. The company will not disclose how many subscribers it has, but observers put the number at less than 10,000.

At least one former contender will drop off the list for 2004: DVD.com has shuttered its Web site, which ranked No. 4 in 2002 and dropped to No. 5 in 2003.

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