|"Video Killed the Radio Star" - then "DVD Killed the Video Star"|
|Topic||Supply and Demand
|Key Words||Rentals, purchases, revenue, market, sales, consumers, price, producers|
The home video market, including both rentals and purchases, increased 4.3 percent in revenue terms in 1999 for a total of $19.4 billion. Disney obtained 30 percent of the market with hits such as Mulan and A Bug's Life. Warner Bros. was second with 19 percent of revenues.
The DVD market grew much faster, from $416 million in 1998 to $1.5 billion in 1999. Time Warner outpaced Disney in DVD revenues. Sales of DVD movies are expected to reach $6.3 billion in 2002, while video sales (excluding rentals) are expected to bring in only $4.8 billion.
The growth in DVD sales will be promoted by an increase in DVD players from 4.6 million in 1999 to 25 million in 2002. Another influence is the fact that the sharp video and dynamic sound, among other things, lead owners of DVD players to buy an average of 22 DVD movies a year, while video consumers buy only six movies a year. Also, the price of DVDs is expected to fall steadily from $23.90 in 1998 to $19.91 in 2002, bringing it closer to the lower price of VHS movies. These trends are inducing film producers to issue more old and new films on DVD.
(Updated June 1, 2000)
|Source||Keith L. Alexander, "DVD sales energize home video market," USA Today, April 20, 2000.|
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