Home Video Market

In Hollywood, few months after the theatrical release, a film is released on video (VHS and DVD) with much fun-fare and marketing promotions. Film-lovers, who watched or missed a good film in theaters, invariably rent out a video. And if they intend to watch the film more than few times, they buy a video, especially in the case of children's films as children love to watch the same film many times over. Often, sequels of a successful children's film are released only in the home video market.

For Hollywood, the home video market is bigger than the theater market. Theatrical admissions in its domestic US market peaked at 4.1 billion ticket units in 1946, then they declined up to 820 million in 1971, and then they stabilized and started the upward movement for the next three decade; in 2002, theatrical admissions were 1.642 billion.⁹⁷ This tremendous decline is largely attributed to the growth of television, which had penetrated 2% households in 1947 to 90% in 1961 to 99.8% in 2002, and associated home video market.

In 2002, DVD sales and rental alone overtook the domestic box office receipts despite unprecedented box office successes such as Spider-Man (US $406 million), Start Wars: Episode II (US $310 million), Harry Potter (US $317 million), and The Lord of the Rings (US $313 million). In 2002, theatrical's record-breaking box office take was US $9.5 billion; DVD sales and rental revenue topped US $11.6 billion; DVD and VHS sales came in at about US $12.1 billion; and DVD and VHS rental took in about US $8.2 billion; and Monsters, Inc. alone earned US $347 million in video sales.⁹⁸