Originally Posted by Wiki

[edit] The direct-to-DVD market
As the DVD format supplants the videocassette, companies have increasingly released movies in DVD format rather than VHS, causing the term "direct-to-DVD" to replace "direct-to-video" in some instances.[6] However, the word "video" does not necessarily refer to VHS cassettes. The new term used is DVDP ("DVD Premiere").[7] Such films can cost as much as $20 million[8] (about a third of the average cost of a Hollywood release[9]) and feature major actors like Jean-Claude Van Damme and Steven Seagal.[8] Salaries for such actors range from $2 to $4 million (Van Damme) to $4.5 to $10 million (Seagal).[8] According to Variety, American Pie: Band Camp sold a million copies in one week, despite retaining only two actors from the original trilogy.[10]

In recent years, DVD Premieres have become a substantial source of revenue for movie studios. DVDPs have collectively grossed over $3 billion over the last few years,[8] and have matured enough that DVDP divisions of studios now option their own films[citation needed]. Studios realized that DVDP movies can be shot on a smaller budget, thus allowing studios larger profits with the combined revenues of home video sales and rentals[citation needed], in addition to licensing movies for television and for distribution abroad (where some DVDP movies do see theatrical releases)[citation needed].

Distributing DVDPs is not a practice reserved solely for larger Hollywood studios. Several companies, such as The Asylum, MTI Home Video, and York Entertainment distribute DVDPs almost exclusively[citation needed]. The budgets for films distributed by these companies are even smaller than those of ones distributed by a larger studio, but these companies are still able to profit off their sales.

Originally Posted by corradoboy