DVDs Are Turning into a Solid Gold Hit
Hollywood's biggest blockbuster last year wasn't named Harry. It was a little, shiny DVD disk. U.S. consumers spent more than $6 billion in 2001 buying or renting movies on DVD--a number fast closing in on the $8.35 billion they spent at the box office, according to the studio-backed DVD Entertainment Group. That's more than double the 2000 total for DVDs, while the number of movie tickets sold in 2001 remained roughly flat.
Costing less than $1 each to produce, retailers can usually sell a DVD for $20 and return a hefty margin to Hollywood studios. "DVD is our engine of growth," says Steve Beeks, president of Artisan Home Entertainment, which last year dipped into its 6,700-film library to release on DVD the likes of Rambo and Terminator 2.
The economics are especially compelling for older films, such as Walt Disney's 1937 classic Snow White and the Seven Dwarfs, which already had earned more than $126 million at the box office. Disney spent an estimated $1 million extra for goodies, including a documentary, an interactive guide that looks like Snow White's mirror, and games. Shipping 5 million copies, it stands to make $10 to $12 per disc, or more than $50 million on that film alone.
Video consultant Adams Media Research forecasts DVD sales increasing 33%, to $9 billion this year. And since only 23% of U.S. households own DVD players, a number expected to hit 34% in 2002, there's plenty more ahead.
By Ronald Grover
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