WARNER TOPS IN DVD SALES DISNEY TAKES NO. 2 IN 2004 RANKINGS.

Byline: Greg Hernandez Staff Writer

Powered by the DVD releases of ``The Lord of the Rings: The Return of the King,'' ``Harry Potter and the Prisoner of Azkaban'' and the final season of ``Sex in the City,'' Warner Bros. Home Video outdistanced rival studios to finish No. 1 for 2004.

A year ago, Warner had been locked in a heated battle for top studio honors with Disney's Buena Vista Home Video, with both studios claiming victory. This year it was no contest with a still-formidable Disney settling for second place.

The home-video divisions of the major motion picture studios continued to thrive as the DVD format grabbed an even firmer hold on consumers. DVD players are now in more than 63 million households and there was also a roughly 18 percent increase in home video sell-through in 2004 with DVD sales up almost 30 percent, according to Kagan Research.

Warner's release schedule not only included box office hits released by the Warner Bros. film studio, but also titles from New Line Cinema such as ``Rings'' and ``Elf'' and from HBO including ``Sex'' and ``The Sopranos.'' All share Time Warner Inc. as a parent company.

``We had great product,'' said Jim Cardwell, president of Warner Home Video. ``We exploited our television library, getting into the TV business very quickly and actively and I think our catalog of programs all worked.''

Warner released several boxed sets of ``Friends'' as well as a single DVD of the much-ballyhooed final episode last spring. Other popular boxed sets featuring single seasons of shows included ``The West Wing,'' ``The OC,'' ``Smallville'' and ``Nip/Tuck.''

``The good thing about television is that you get multiple seasons,'' Cardwell said. ``It's like having a movie franchise but instead of having three installments, you can get nine or 10.''

TV on DVD did experience explosive growth during the year. Revenue in that particular genre could rise by as much as 30 percent from the $1.42 billion consumers spent on television titles in 2003. This would represent 14 percent of DVD spending overall, according to the Digital Entertainment Group, an industry trade organization.

Second-place Disney still had an impressive year, especially considering it did not have box office blockbusters such as 2003's ``Finding Nemo'' and ``Pirates of the Caribbean: The Curse of the Black Pearl'' to lead the way. Instead, its feature film release slate was filled with such box office disappointments as ``Hidalgo,'' ``The Alamo,'' ``Around the World in 80 Days'' and ``Home on the Range.''

But the studio had three titles in the top 15 for 2004. It scored big with the direct-to-video sequel ``The Lion King 1 1/2,'' the midlevel box office hit ``Haunted Mansion'' and the 2003 animated release ``Brother Bear,'' which more than doubled its box office take of $85 million with robust video sales and rental activity.

``We're happy with our conversion of the products we had to sell,'' said Pat Fitzgerald, executive vice president of sales, distribution and trade marketing for Buena Vista Home Video. ``When you look at those titles and what we achieved in video sales, they are extremely strong.''

Universal Home Entertainment takes third place, thanks in no small part to the DreamWorks titles it distributes. DreamWorks title ``Shrek 2'' was the top-selling video release of the year with 24.2 million units sold in North America. This resulted in $458 million in revenue, enough to top the film's $436.5 million domestic gross, according to figures compiled by Video Business magazine.

DreamWorks also contributed ``Elf,'' ``Collateral'' and ``The Terminal'' to Universal's home-video coffers. Universal enjoyed major success with hit summer releases ``The Bourne Supremacy'' and ``Van Helsing'' and made big DVD hits out of box office also-rans ``The Chronicles of Riddick'' and ``The Rundown.''

Fox Home Entertainment also claimed third place Tuesday by separating DreamWorks titles from Universal's overall share. Fox had a deep bench of box office hits to put on the market, beginning with this fall's ``The Passion of the Christ'' that sold $4.1 million on its first day alone. It also had the DVD release of the ``Star Wars Trilogy,'' ``The Day After Tomorrow'' and ``Cheaper by the Dozen,'' which were all among the top 10 titles of the year.

``It's been a banner year overall,'' said Steve Feldstein, Fox's senior vice president of corporate and marketing communications. ``So much so that our market share has grown by over three points. We've had five titles debut at No. 1 on the sales chart.''

Sony Pictures Home Entertainment declined to claim a ranking Tuesday, saying final numbers were still being crunched. Rival studios place it at either fourth or fifth.

Sony landed in the year's top 10 best-selling titles with ``Spider-Man 2,'' which sold a whopping 5 million units in one day when it was released in late November. The same month, Sony also released the ``Seinfeld'' DVD set, which was accompanied by a massive publicity campaign and an NBC prime-time special. Other standout titles included the controversial documentary ``Fahrenheit 9/11'' and the Adam Sandler comedy ``50 First Dates.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com