Consumers spent $20 billion on video in 2000
By Scott Hettrick -- Video Business, 1/6/2001
JAN. 6 | Rental revenue was at an all-time high of $8.25 billion, according to VSDA VidTrac, and final sales tallies later this month are expected to meet or surpass the projection by Tom Adams of Adams Media Research of a nearly 27% increase to $11.67 billion.
DVD software sales alone jumped nearly 269% to $4.03 billion, according to Adams.
Three titles--all from Buena Vista Home Entertainment--each generated at least $200 million in consumer spending in purchases and rentals on VHS and DVD, according to VB research based on data from VSDA's VidTrac, studios and retailers.
The $268 million spent on Buena Vista's animated Tarzan is not only 56% more than the $172 million the movie grossed at the box office, it's $15 million more than the biggest movie in theaters in 2000, Universal's How the Grinch Stole Christmas.
That's OK by Universal Studios Home Video president Craig Kornblau, whose division had a record $1 billion of studio revenue in the year without the benefit of the video version of the Grinch. Universal started off 2001 already knowing it has hits such as the $253 million Grinch and the $161 million Meet the Parents in the video bag and possibly a couple of late-in-the-year franchise sequels including Jurassic Park 3 and The Mummy 2.
DreamWorks found out in 2000 how successful a studio can be with just a few good hits. With only eight releases in the year, the studio surpassed Artisan and MGM in overall market share with $772 million spent at retail on those titles alone. It was the studio's best year yet, according to domestic head of home video Kelly Sooter.
DreamWorks' Gladiator cracked the top 10 video titles of the year without benefit of a sale-price VHS and despite coming to market just six weeks before the end of the year. In fact, aside from Galaxy Quest and American Beauty, all of DreamWorks' releases came in the fourth quarter, including Chicken Run and video premiere Joseph: King of Dreams.
Fox, which also enjoyed a record year with $1.8 billion in studio revenue, had a similar handicap with Star Wars: Episode 1--The Phantom Menace. However, despite the lack of a DVD version, the third-biggest movie of all time amassed $176 million in consumer rentals and sales on VHS.
Fox also had a successful late entry of its own--X-Men, which generated $141 million.
Buena Vista, with four of the top 10 titles--including video premiere The Little Mermaid II: Return to the Sea, which generated $121 million--swam away with more than 22% of every dollar spent on video in 2000, for a total of $4.4 billion.
In further evidence that the rental market is still vibrant, more than two-thirds of the money spent by consumers on two of the top 10 titles, Buena Vista's The Sixth Sense ($200 million) and Warner Home Video's The Green Mile ($157 million), was spent on rentals of those titles.
Of the $118 million spent on Paramount's Double Jeopardy, 88% came through rental fees.
Some studios such as Buena Vista and Warner have only about a third of all monies spent on their titles go to rentals. But more than half the money spent on Paramount titles and 50% of Columbia TriStar Home Video's is in the form of a rental fee.
Meanwhile, the revenue shift from DVD became clear this year, with 29% of retail spending on Warner titles coming from DVD and 30% for DreamWorks.
This year-end report will appear in the Jan. 15 print edition of Video Business.
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