Audio Video News

The music industry may be in the dumps, but the home video business is soaring, according to a January report from trade journal Video Business.

DVD's seemingly unstoppable momentum helped push the home video industry's total revenue over the $20 billion level for 2002, with a 25% surge in consumer spending on the purchases of movies. Last year, spending on the purchase of DVDs grew 52.6% to $8.7 billion, more than double the $3.4 billion spent on VHS.

VHS is clearly on the way out with movie fans—sales of prerecorded videotapes dropped by 17.1% last year. Most video stores have overhauled their displays and floor space accordingly, devoting larger areas to DVD and ever-diminishing space to VHS.

Former Warner Home Video president Warren Lieberfarb, who abruptly left the company in late December, long campaigned to make the DVD a "sell-through" format rather than a rental vehicle. His efforts appear to be paying off. Sales of DVD movies are growing as the overall rental market is shrinking. In 2002, consumer spending on rentals declined 3% to $8.2 billion, with 144 million fewer copies rented, according to figures supplied by the Video Software Dealers Association. Consumers who rented also preferred DVD: spending on DVD rentals rose 106% to $2.9 billion.

The top five DVD rentals, for 2002 were: Ocean's Eleven (Warner) $33.4 million in total revenue, Training Day (Warner) $30.3 million, Don't Say a Word (Fox) $28.5 million, Mr. Deeds (Columbia) $27.0 million, and The Others (Miramax/Buena Vista) $25.4 million.