By comparison, most anime titles released on video/DVD are compilations of episodic television, or they have had a theatrical release in other territories before finding U.S. home distribution. The following is a sample of rental revenues for anime titles released in the U.S. during the last couple of years. Titles with a domestic theatrical release have been included to give a sense of the best-case scenario for this niche market.

The Lay of the Land
The home entertainment market is potentially lucrative, but it is interesting to note that most direct-to-home projects are based on established brands with enormous consumer awareness. While the top 25 direct-to-home animated titles have earned $1.5 million or more in cumulative rental revenue alone, the top performers are based on existing franchises: film properties, television series, books, comicbooks and toys.

Four direct-to-home videos are part of a plan to relaunch the Strawberry Shortcake franchise. © 2003 DIC Ent. Strawberry Shortcake character designs ™ & © 2004 Those Characters from Cleveland Inc. Used under license. All rights

Artisan Entertainment, for instance, distributed the original title The Nutcracker Suite (2001) starring the Barbie doll. The production was successful in boosting sales of tie-in products from Mattel and other partners, such that sequels have followed each year: Barbie as Rapunzel (2002), Barbie of Swan Lake (2003) and Barbie: The Princess and The Pauper (2004). Similarly, DIC Entertainment has produced four direct-to-home videos as part of a plan to relaunch the Strawberry Shortcake franchise. Paramount Home Entertainment also recently signed an agreement with Hasbro to distribute direct-to-home titles based on the Transformers, G.I. Joe, Tonka, Duel Masters, Secret Central, Weebles and Candy Land toy franchises.

The majority of direct-to-home business comes through direct sales to consumers. As of October 2004, Disney’s The Lion King 1-1/2 had earned $133.8 million in sales, beyond its $17.9 million in store rentals. Disney’s The Three Musketeers, during its first seven weeks of release, had earned $22.5 million in sales and $6.4 million in rentals. In two weeks of its release, Artisan’s Barbie: The Princess and The Pauper had earned $7.6 million in sales and $1.6 million in rentals.

A title’s performance depends on marketing, promotional campaigns and retail support. The first several weeks are critical to its success, as 80% of home entertainment business occurs within the first quarter (three to four months) of a title’s release. The market is seasonal and cyclical, with over 50% of annual sales accounted for during October through December. The following numbers do not represent sales to consumers, but revenue earned by the distributing studio for units shipped to retailers.