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The Economics of TV and Film

SNL Kagan announced that, according to its research, wholesale DVD revenue dropped 43.9% from $7.97 billion in 2009 to $4.47 billion in 2010.

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Unedited press release follows:

SNL Kagan Economics of TV and Film Report: Wholesale DVD Revenue Drops by Shocking 43.9% in 2010 — Will VOD Services Like Netflix Make DVDs a Thing of the Past?

Find out which studios ranked within the top 5 for capturing marketshare, DVD units shipped and wholesale DVD revenue. Also highlighted are DVD market averages and totals, as well as trends from 2006-2010, and the top DVD titles from 2008-2010.

May 12, 2011 — The year 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 as consumers alter their home video viewing habits.

Consumers are now opting to sign up for streaming and/or rental services, like Netflix Inc. 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 in our database that were released on DVD in 2010, and among those titles wholesale revenue dropped a shocking 43.9% from $7.97 billion in 2009 to $4.47 billion in 2010. It is important to note that this 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% to nearly 226.0 million.

On average, films shipped 545,000 units and made $10.8 million in wholesale revenue, off 52.4% from the $22.6 million average in 2009. Over the past five years, average wholesale revenue posted a negative 13.7% 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% 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% share from $453.3 million, and Universal, with a 9.9% 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% 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.

Report prepared by SNL Kagan Analyst, Wade Holden

About SNL Kagan
SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit