Kagan Research Estimates Home Video Sales Increase 18% In 2004, As DVD Booms and VHS Wanes

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In its just released databook 'The State of Home Video 2005' Kagan Research estimates a booming sell-through market in home video, with DVD sales up almost 30% by the end of 2004. Kagan analysts point out that the increase in DVD consumer spending has been driven by the combined rise in movie studio marketing and falling prices at the retail counter.

Kagan Research has announced new financial data and projections for the home video market. In its just released databook 'The State of Home Video 2005' Kagan estimates an 18% increase in sell-through in home video by year-end 2004. Kagan's sales and shipping data show a dramatic shift from VHS to DVD with DVD sales up almost 30% as VHS sales dropped 42%.

Falling prices for DVD hardware and software and increased studio spending on DVD marketing -- an average spend of $6.1 mil. per title, up $800K from $5.3 mil. in 2002 -- are driving up total consumer spending on home video in 2004, estimated to increase 7.5% per household (including rental and sales).

According to Kagan Senior Analyst Derek Baine, “How a film performs in theaters generally indicates how well it will do on home video and, down the line, in other revenue streams; but in terms of studios’ financial return, home video plays a much larger part than theatrical revenues....Our annual study of video efficiency—a ratio of wholesale video revenues to theatrical rentals—by genre hammers the point home. The 244 rental-priced titles in the 2003 study posted a 2.11x ratio, meaning they made more than twice as much money in home video than in theatrical rentals.”

The annually updated Kagan study tracks every aspect of the DVD phenomenon, including sales and rental data, hardware and software markets. The range of coverage also includes VCR, VHS/DVD and emerging VOD and online video sectors. The new data provides exclusive revenue estimates and 10-year projections for the U.S. Home Video Retail Industry...data featuring Factory-to-Dealer Player Shipments, Retail DVD Hardware Sales, U.S. Sell-Through Market and the Rental Market.

The State of Home Video 2005

170 pp / 77 Tables & 41 Charts

http://www.kagan.com/cgi-bin/pkcat/shv05

Featuring sections on:

  • DVD Hardware
  • VHS Hardware
  • Performance Benchmarks

– Video Efficiency by Genre

– Video Efficiency by Rating

  • Retail Rental
  • Retail DVD
  • Retail Sell-Through
  • Sell-Through Titles

– DVD Sell-Through

– VHS Direct-To-Sell-Through

  • Suppliers

– Profitability

  • Video-On-Demand

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Harvey Kraft
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