Future of home vidio rosy, study shows
LOS ANGELES (UPI): A study released Wednesday on the future of the home video market in the United States predicted that in the foreseeable future video viewing will remain one of America's favorite leisure activities.
The white paper, commissioned by the Video Software Dealers Association for its annual meeting in Los Angeles, also shows that the US$16 billion-a-year videotape business should hold its ground against upcoming rival technologies, such as digital video disc, which is expected on the market later this year.
According to a survey of 4,500 people by an independent research firm, video cassette recorder usage grew 8 percent in 1995 to an average of 13.3 times per month, up from 12.3 times per month in 1994.
Contrary to concerns in the entertainment industry, the video rental business is being helped, not harmed, by the growing "sell-through" concept of affordable purchase pricing.
"Most major sell-through titles are also major video rental successes," the VSDA noted. It said a study conducted for Video Software Magazine shows that frequent video purchasers also are the most active renters.
"Thus the sell-through business supports the rental business rather than detracting from it," the VSDA report said.
The white paper also said the videotape business will remain strong against the upcoming digital video disc (DVD) format, predicting the new equipment and discs will not generate significant sales for at least five years.
VSDA said VCRs are extremely popular (87 percent of American television households have them). It also noted consumers initially will resist buying expensive DVD players to supplement or replace equipment they already have, especially since DVD players cannot record.
While video rentals and purchases are taking a bite out of the box office, overall they are good for Hollywood's bottom line. The paper said consumers spend three times as much on videos as they do in movie tickets, and they rate renting a video as one of the best values for their dollar.
"The home video industry has fortified the motion picture industry by creating a revenue stream that now contributes over half of Hollywood's film revenues," the VSDA said.
The VSDA survey asked respondents to rank a number of leisure activities on a scale of one to 10 in terms of entertainment value. Renting a video placed first with a 7.1, followed by going to a movie theater (6.2), attending a sports event (6), watching cable television (5.5), watching a premium or pay channel (4.4), and watching a pay-per-view movie (3.6).
The VSDA, a non-profit trade association, represents more than 3,200 companies in the United States, Canada and 22 other countries, including retailers, distributors, movie studios and video game manufacturers.