VoD profits not offsetting DVD decline

A newly-released SNL Kagan study reveals that 2010 was similar to 2009 in that the domestic box office hit a record high, once again, while the domestic video retail market was continuing its steady decline. Consumers are now opting to sign up for streaming and/or rental services, like Netflix. They are using VoD services more and more, as they discover these services can be cost effective.

Unfortunately for studios, according to SNL Kagan, the revenue from VoD has not yet offset the resulting drop in DVD sale revenue, which was their top earner for more than a decade now.

SNL Kagan tracked 415 titles e that were released on DVD in 2010, and among those titles wholesale revenue dropped 43.9 per cent from $7.97 billion in 2009 to $4.47 billion in 2010. This, however, does not include Blu-ray revenue, which grew significantly in 2010.

The average wholesale price was relatively flat when compared with 2009, but there were significantly fewer units shipped, down 43.8 per cent to nearly 226.0 million.

On average, films shipped 545,000 units and made $10.8 million in wholesale revenue, off 52.4 per cent from the $22.6 million average in 2009. Over the past five years, average wholesale revenue posted a negative 13.7 per cent compound annual growth rate (CAGR).

Fox claimed victory once again in 2010 in terms of market share, thanks primarily to “Avatar.” The distributor had 15 titles in the study, and those titles took in $605.9 million from 30.1 million DVDs shipped.

Warner was a very close second, with its 24 titles shipping 31.2 million units — the most out of all the distributors. The company took in $605.7 million, for a 13.5 per cent market share.

Buena Vista trailed right behind Warner, bringing in $600.6 million from 29.8 million units shipped. Rounding out the top five were Columbia, with a 10.1 per cent share from $453.3 million, and Universal, with a 9.9 per cent share from $443.5 million.

“Avatar” was the number one DVD in 2010, shipping over 10.3 million units and making $207.5 million in revenue—approximately 34.5 per cent of Fox’s total wholesale revenue.

“Toy Story 3” ranked second, with $201.8 million from more than 10.0 million units shipped. Meanwhile, “Twilight:  New Moon” and “Twilight: Eclipse” ranked third and fourth, respectively, with $174.8 million and $160.7 million.

Overall, the top 15 DVDs of 2010 made $1.78 billion in wholesale revenue, averaging $118.7 million. On average, the top 15 shipped 5.9 million units shipped.

You must be logged in to post a comment Login