Sales of pre-recorded videos are slowing, as Canadians show a greater interest in watching movies in a theatre rather than at home.

Statistics Canada says revenues from distributions to cinemas rose sharply in 2004/2005, while revenues from sales of DVDs and videocassettes levelled off after four years of growth.

Total film industry revenues climbed to more than $3.5 billion in 2004/2005, up 3.0 per cent from the previous year, and profit margins improved to 22.7 per cent from 21.8 per cent in 2003/2004.

Revenue from distribution to movie theatres rose 16.6 per cent to $446.3 million, while revenue from the wholesaling of DVDs and videocassettes remained unchanged at just over $1.8 billion.

The DVD is not about to disappear, however. DVD sales and rentals make up 51 per cent of the total revenue of film and video distributors, and account for 77 per cent of the video wholesaling market. Almost 70 per cent of Canadian homes had a DVD player in 2004.

Canadian families spent an average of $112 on movies at the cinema in 2004/2005, up from $106 in 2003/2004, Movie attendance increased, primarily due to a 20.4 per cent increase in attendance at drive-ins.

Canadian content products continued to show improved revenues in 2004/2005, especially in the movie theatre and the pay-TV markets. Canadian content movies and television programs maintained their overall share of the domestic market at 11 per cent, while Canadian content in movie theaters remained steady at 4 per cent of the market.