DVD REPORT FINDS BIG MARKET FOR HOME VIEWING

CAREY POLIS

NEW YORK - DVD sales are on the rise, movie-going rates are stagnant, and supermarkets should take note, according to a study from Guideline, a business research and analysis firm here.

Eighty-five percent of consumers watch movies at home, with 49% of respondents not watching a movie until its DVD release. "It's safe to say that some undoubtedly are buying or renting DVDs, rather than viewing movies on the big screen," according to the "From Film to DVD" trend report, which was issued this month.

The study also noted that women are more likely than men to wait for the DVD release. Since women are the main supermarket consumers, Frank Dudley, Guideline's vice president of marketing, believes supermarkets could learn from the research. "Supermarkets would be smart to buy titles targeting women and the family as opposed to catalog titles," he said.

Supermarkets typically do not see the DVD volume or margins enjoyed by discount stores, he noted. Therefore, it is necessary to "be smarter in terms of genre of films" based on customer demographics. Simply put, family movies and romances may have more selling power in supermarkets than other genres, he said.

Only 1% of respondents regularly buy their DVDs at grocery stores, while 54% purchase them from discount stores such as Wal-Mart and Target, the study found.

Guideline surveyed 1,000 consumers in May 2006 and worked with members of the Promotional Marketing Association's Entertainment Advisory Board, which represents all major Hollywood studios, to create the survey.

Among DVD purchasers, there is a divide between casual buyers (49%) and collectors (24%). For those casual buyers, supermarkets could benefit from placing DVDs closer to snacks or the checkouts as an impulse buy, Dudley suggested.

Out of the 22% of consumers who still choose big screen and popcorn over living room couch and remote control, 46% prefer the larger-sized screen and another 46% think that movie-going is just a fun activity in itself, the study found.

A movie's box-office revenue declines about 50% each week, leading to debate about simultaneous or quicker DVD releases, the study said. The theater-to-DVD window has already declined from last year, now at four months instead of six. Studios are increasingly relying on DVD sales to help them make a profit or at least break even from expensive production costs.

Fifty-seven percent of respondents indicated that a movie's release has no effect on their decision to buy or rent the movie, though 20% believe that an earlier DVD release means it is a bad movie, decreasing their likelihood of renting or purchasing the DVD.

Additionally, 68% of consumers will purchase a movie if they really want to see it and 20% of consumers will purchase a movie based on the special features offered on the DVD.