Monday, December 13, 2004
Dividing the DVD revenue
According to this New York Times story (registration required), negotiations are currently underway to change how revenue from DVD sales and rentals is divided between all the players that help make and distribute a movie:
In 1996, the year before the home DVD player was introduced, consumers spent $6 billion buying VHS tapes, and $9.2 billion renting them, with the studios taking in 75 percent of sales and 20 percent of rentals. In 2004, according to Adams Media Research, consumers will spend $24.5 billion buying and renting DVD's and VHS tapes. Almost $15 billion of that will be in DVD sales, and nearly 80 percent of that will go to the studios through their home entertainment divisions.
The explosion in DVD sales has changed the calculus of the Hollywood hit. Last year, "Finding Nemo" sold $339.7 million in tickets when it was released to the nation's movie theaters. It went on to capture a greater amount - $431 million - in home video (including DVD) retail sales and rentals.