Top $17 Billion in ’92 : Video Sales, Rentals Industry Scores Record $1 Billion During the Holiday Season Alone

Underscoring the growing importance of the home market to Hollywood, domestic video sales and rentals soared to a record $17.2 billion in 1992 and for the first time exceeded $1 billion over the important holiday season, a report by a leading video market research firm shows.

The study by New York-based Alexander & Associates, which tracks the video market for Hollywood’s major studios, shows a year-end surge that surpassed even the most optimistic projections--$536 million in video rentals and $471 million in sales in the final two weeks of the year alone.

“This country is consuming movies like there is no tomorrow,” said Warren Lieberfarb, president of Warner Home Video.

The $1-billion video performance--up 21% from a year earlier--was more than three times Hollywood’s domestic box office total in those same two weeks. For the year, the domestic box office rose only slightly, to $4.9 billion.

The record-shattering sales of Walt Disney Co.’s animated classic “Beauty and the Beast” was one reason for the video industry’s year-end surge. Also contributing were such popular rentals as Warner Bros.’ “Lethal Weapon 3” and “Batman Returns,” Disney’s “Sister Act” and Paramount’s “Patriot Games.”

“The year finished up very strong, and the same pace is continuing into January,” said Steven R. Berrard, vice chairman and acting president of Blockbuster Entertainment Corp. in Ft. Lauderdale, Fla., the nation’s largest video retailer.

Ironically, the growth in business comes as some experts are predicting videotapes will soon be swept away by new technologies such as electronically transmitted movies on demand. Some go so far as to predict that video stores will be obsolete within a few years.

Video executives downplay the threat, arguing that technologies still need development, that the proliferation of videocassette players means the industry will be around for a long time and that it remains to be seen whether large libraries of films can be delivered to homes affordably.

“This business is not dead. People think all the threats to the industry are in place today,” Blockbuster’s Berrard said.

Overall, Alexander’s preliminary totals show video sales and rentals climbed 16% for the year, recovering from a flat year in 1991 when the industry was hurt in part by a soft economy.

Sales for the year climbed 27% to $5.9 billion, thanks largely to the popularity of “Beauty and the Beast.” Tania Steele, a vice president with Disney’s Buena Vista Home Video unit, said consumers to date have bought about 15 million copies of “Beauty and the Beast.”

Also contributing to the industry sales increase was the highly publicized promotion in which McDonald’s sold Orion’s Oscar-winning “Dances With Wolves” at a steep discount with certain purchases.

Preliminary figures show video rentals during the year rose 11% to $11.4 billion. Some of the leading video rentals during the year were Carolco’s “Terminator 2: Judgment Day,” Orion’s “Silence of the Lambs,” 20th Century Fox’s “Home Alone” and Columbia Pictures “Boyz N the Hood.”

Home Video Boom

Boosted by record sales of “Beauty and the Beast” and such rental hits as “Terminator 2” the home video market set new highs last year.

Source Alexander & Associates