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DVD has been a cash cow for the video industry since it debuted in 1997, and competition among studios to capture market share has been intense. For the most part, hit movies determine how many DVD units a studio sells each year. However, branding and marketing also play a big part in reaching consumers.

In 2001, Warner Home Video was the runaway leader in DVD market share. Warner, which was the first studio to actively promote DVD and drive sales with lower prices, captured 22.8% of the market last year (according to ACNielsen's VideoScan). DreamWorks and Universal Studios (which distributes DreamWorks' home video product) knocked Disney out of second place with 14.4% of the market compared with 13.3% for the House of Mouse. Columbia TriStar Home Entertainment was fourth with 11.8%, followed by Twentieth Century Fox Home Entertainment (9.4%), MGM Home Entertainment (7.8%), Paramount Home Entertainment (6.8%) and a host of independent suppliers who collectively cornered 14.5% of the market.

In terms of price and quality, it's hard to separate the major players in DVD since all the studios load their discs with special features and extras and price them in the same range. But at least one studio- widely considered to be the master at branding and licensing-makes a direct link between the studio name and DVD in its advertising.

"When Disney does their TV commercials they usually mention that a movie is coming out on 'Disney DVD,' said Ralph Tribbey, publisher of the DVD Release Report. "They're the only studio that tries to trademark DVD that way in its advertising."

Most studios try to stake their claim with promotions that target niches and genres. One of the most ambitious campaigns in recent years was launched in October by Columbia, which is teaming up with General Mills to target the fast-growing children's DVD market.

General Mills is packaging eight million DVDs from Columbia on the front of cereal boxes in a three-month promotion that will run through the holidays. The free DVDs will include well-known Columbia titles, such as "Bear in the Big Blue House" and "The Muppets," and will be packaged on several different General Mills cereals, including Lucky Charms and Cheerios.

"It's a great way to get a lot of exposure and we're hoping it will drive sales of our family titles on DVD," said Lexine Wong, executive vp of worldwide marketing for Columbia.

DreamWorks is targeting the same market with a new branded line of "DreamWorks Animation" tides that will debut in November. The repackaged DVDs will feature a new logo and lower prices. The titles will include "Shrek," "Chicken Run" and "The Prince of Egypt."

"Over the years, we've built tremendous equity among consumers as a leader in highly creative, family friendly product and the DreamWorks

animation line takes us to the next level," said Kelly Sooter, domestic head of DreamWorks Home Entertainment.

In addition to raising its profile in the family market, Columbia is targeting high-end consumers with its Superbit titles. The films are remastered in a high-definition format and are transferred to disc at twice the normal bit rate, producing a higher-quality picture that shows up when viewed in a home theater setting or on a plasma TV.

Twentieth Century Fox has established itself as a specialist in television programming on DVD. The studio recently reported that sales of boxed sets of TV series ranging from "M*S*A*H" to "The X-Files" generated $100 million in sales during the past year, making it the leader in the fast-growing TV to DVD market. Fox added a new twist to the TV genre this year when it released the first season of the series "24" on DVD in September one month before the second season began and will do the same for the FX Network series "The Shield" in January.

Warner Home Video has tapped into the TV market with boxed sets of hit series from HBO. The studio's best sellers include full season sets from "The Sopranos" and "Sex in the City." Paramount Home Entertainment also has established itself in the TV genre, turning out boxed sets of the "Survivor" series and full season sets of the entire run of "Star Trek: The Next Generation."

And while most studios no longer use low prices as a way to distinguish themselves, MGM is making a bid to attract consumers with impulse-buy prices on re-released titles. "Warner was the first studio to really get aggressive on price, but MGM has taken it to the next level," said Tribbey. "One year or even six months after they release a title they're coming back and repricing it at $14.98 or even $9.98.

As DVD matures, brand building isn't going to get any easier. Consumers have grown accustomed to the extra perks on DVD, the format has conquered nearly every genre of home video and the studios have fewer niches and trends to get in front of. "By now, all the things that made DVI) so attractive in the beginning are almost taken for granted," said Tribbey. "It's no longer a matter of selling the format as it is selling the product itself."

RIDING THE DIGITAL WAVE

DVD MARKET SHARE BY STUDIO

STUDIOS                              2001

Warner Home Video                    22.8%
DreamWorks (Universal Studios)        14.4
Disney                                13.3
Columbia TriStar Home Entertainment   11.8
Twentieth Century Fox Home             9.4
 Entertainment
MGM Home Entertainment                 7.8
Paramount Home Entertainment           6.8
Independents (aggregate)              14.5

SOURCE: ACNielsen VideoScan

COPYRIGHT 2002 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2002 Gale Group

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