The most important phenomenon in the film industry, nowadays, is not a magic device but a humble circular piece of plastic: the Digital Versatile Disc.
Next year, for the first time, sales of movies in DVD format are forecast to outsell those on video cassette in America, reaching a total of $9.5 billion, according to Morgan Stanley. Already, some 24 Million American households have DVD players, 80% more than a year ago. This technology, which was considered a flop when it was launched in 1997, is now the basis for the fastest-growing consumer appliance ever.
People appear to want to build up collections of DVDs, rather as they do of recorded music. The DVD is steadily gaining shelf space, even in the movie-rental store, and it should overtake the cassette even there within three years. And shops like DVDs, not least because they take up less space.
But how lasting will the DVD effect be? Some 80% of a film's revenue comes from its distribution after the cinema release: to home video and pay-TV for example. "The largest single portion of that revenue will be the DVD business," says Christopher Dixon of UBS Warburg - an investment bank, which in turn will help to reduce the risk involved in making movies. "The DVD is the most exciting development in the film industry," he adds, "but every eight years there has been a new distribution platform in the entertainment business. None of them lasts forever.