DVD sales represent over half of the revenues generated by most movies, but this growth, which has been in the double digits since 2000, has slowed considerably in recent years. According to the NPD Group, DVD unit volume sales increased by just 4% through June 2006, which is less than half the growth at the comparable time a year earlier. One bright spot in DVD sales, however, has been sales of DVDs of TV programs. The NPD Group reports that overall TV-DVD sales accounted for 9% of home video sales in June, up from 7% the year prior.
The strongest growth for the TV-DVD category came from sales of one-hour TV dramas, such as Desperate Housewives, Lost and 24, which increased 48% year over year. The adult-animation category, which includes The Family Guy and The Simpsons, rose 36%, while sales of science fiction titles increased 34% and half-hour comedies grew 7%.
TV content is now widely available on the Web for download. iTunes is the leading Website when it comes to paid video downloads in the US, with a 67% market share, compared to MovieFlix at 19% and CinemaNow at 9%.
Widespread broadband and greater amounts of TV content online have been the ingredients for strong growth in TV-title digital downloads. NPD reports this category of digital downloads grew 255% between August 2005 and August 2006. Subscription rentals of TV content also grew, but at a modest 39%.
TV content has moved outside the box in the corner of the living room to the Web, PCs and portable devices. Increasing adoption of digital video recorders and usage of video-on-demand are further challenges to the traditional TV-ad model, but those marketing executives that are appropriately schizophrenic and adventurous should see more opportunities than challenges.
See eMarketer's Hollywood Online report for related information.