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Studios Take TV on DVD and Rerun With It

Old and current shows, beefed up with extras, bring in as much as $1 billion a year. Success has erased retailers' skepticism about the format.

March 13, 2003|Meg James | Times Staff Writer

What do Fred Sanford, Tony Soprano and Homer Simpson have in common?

D'oh! -- as in big money.

Sales of television shows on DVD have become the fastest-growing segment of the home entertainment business, generating an estimated $800 million to $1 billion a year.

When the digital disc format debuted five years ago, most studio executives figured that there would be little interest in shows from the small screen. Videocassette versions never sold well, so retailers had little incentive to stock them.

Not so with the digital format.

"TV DVDs are white-hot," said Peter Staddon, senior vice president for marketing at Fox Home Video. "Everyone is rushing out DVD releases of their TV shows."

Three years ago, fewer than a hundred shows were available on disc. Now, more than 800 are on the market, with dozens more coming out each week. Today, industry experts say, TV shows make up an estimated 10% of the overall DVD market, which last year tallied more than $8.4 billion in sales.

"TV shows on DVD are a relatively small but growing part of the overall market," said Robert Chapek, president of Walt Disney Co.'s Buena Vista Home Entertainment. "But it's $1 billion that didn't exist two years ago."

It's no surprise that hits still on the air, such as "The Simpsons" and "The Sopranos," are top sellers. But nostalgia also is fueling the trend.

Two groundbreaking programs from the 1970s, "Good Times" and "Sanford and Son," both released on DVD by Sony's Columbia TriStar Home Entertainment, are in the top 20 in sales as measured by Nielsen VideoScan. The programs are "a little bit of our American culture, our history, and a lot of it takes us back to our youth," said Benjamin Feingold, president of Columbia TriStar Home Entertainment.

Soon, Columbia will roll out "The Best of the Muppet Show" from 1976. In one episode, Raquel Welch teams up with Miss Piggy to belt out "I am Woman." Another features Mark Hamill, a.k.a. Luke Skywalker, hijacking the "Pigs in Space" crew to rescue Chewbacca. Rhino Home Entertainment plans to release this year "The Lone Ranger" from the 1950s and "The Monkees" from the 1960s.

"Suddenly there is this gold rush, and everyone is going through their vaults," said Ralph Tribbey, who tracks sales for the DVD Entertainment Group, which represents studios.

AOL Time Warner Inc.'s HBO was among the first to hit pay dirt with its DVD releases of "Sex and the City," "The Sopranos" and "Six Feet Under." The DVDs' popularity helped reel in new cable subscribers, said Cynthia Rhea, HBO Home Video senior vice president for marketing.

Those shows, along with HBO's "Band of Brothers," Fox's "The Simpsons" and Warner Bros.' "Friends," all have sold more than 1 million copies, industry sources say. "Band of Brothers," with a $119.98 list price, has topped $70 million in retail sales, making it No. 1 in terms of revenue among all TV shows sold on DVD.

"The Simpsons" helped Fox reap more than $100 million last year from DVD sales of TV shows.

Such success has erased retailers' skepticism that TV shows would sell, something their videocassette predecessors never did.

Size was a problem with the VHS format, said Ken Ross, general manager of CBS' consumer products, which put "I Love Lucy" and "The Honeymooners" out on video.

"You could only fit four episodes on a single tape," Ross said. Now, an entire season can be squeezed onto a handful of discs.

Studios have rejoiced over the success of the DVDs, particularly because revenue from foreign distribution has been drying up as more overseas companies produce their own shows.

Initially, some studio executives had worried that DVD releases might diminish a show's chance to be sold into syndication, when shows really turn a profit. Now, some at Fox believe last year's DVD release of "24" brought in new viewers and enhanced its syndication chances.

"DVDs have clearly extended the popularity of a program," said Bob Cook, president of Fox's Twentieth Television.

Sony's Feingold, a DVD pioneer, said, "None of us ever contemplated that DVD would be a format for television. We thought it would revolutionize the feature film business, but in many ways it is helping to revolutionize the television business."

Although DVD is a relatively low-cost format, there have been some expensive and time-consuming hang-ups.

Obtaining clearances to use theme songs has been a stumbling block because DVD releases were not an issue years ago, when many of the contracts with artists were signed. Getting those approvals, in some instances, can run $2 million to $3 million and could add $20 to the cost of every DVD.

For example, Fox passed on making a DVD of "WKRP in Cincinnati," a popular 1978-82 comedy about a radio station, because of the prohibitive costs of the rights to the theme song as well as the music played during different episodes, Staddon said.

Another speed bump has been the process of providing special features, a key selling point for DVDs.

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