Canadians may be going to the movies less, but according to Statistics Canada, they’re still getting the picture.

Its Film, Video and Audio-Visual Distribution report says 2003/04 saw record profits of $3.4 billion – up about $60 million from 2002/03 – with over half of those earnings from DVD and video sales.

This helped offset the plunge in profits from film distribution to movie theaters, which dropped $80 million in 2003/04, down 17% from 2002/03.

Wholesalers were the big winners. After two years of slowed growth, expenses went down in 2003/04. Combined with higher sales, wholesalers raked in more than $392 million in profits, up 9% from 2002/03.

Canadians are opting for DVDs over videotape by a ratio of more than two to one, while just four years ago, DVD sales in Canada were considered negligible. Discs accounted for 71% of all sales in 2003/04. For the same period, StatsCan’s 2003 Survey of Household Spending showed a 36% jump in the number of Canadian households with DVD players.

Foreign sales of films and videos with Canadian content hit a record high of $321 million in 2003/04, up almost 24% from 2002/03.

The study comes less than a month after StatsCan’s report confirming the long-awaited verdict that movie theater attendance has dropped, with ticket sales at the lowest levels in a decade, down 4.6%. Compounding this was a 16% drop in profits. The box office continues to slide downward despite respectable numbers being pulled in by films such as War of the Worlds and Charlie and the Chocolate Factory.

There have been recent signs that consumer interest in DVDs is cooling in both Canada and the U.S., with major Hollywood titles such as The Incredibles and Shrek 2 not selling to expectations.