DVDs are more than just a welcome new revenue stream for Europe's distributors and producers - they are rapidly becoming their primary source of income.

San Fu Maltha, whose A-Film ranks as the third largest distributor in the Netherlands on the back of such films as Lord Of The Rings trilogy, reckons that those five-inch discs account for two thirds of his entire turnover.

"See what has become of us," joked Maltha referring to both him and Kinowelt's Rainer Koelmelt, one of his fellow panellists on Screen International's DVD panel at the Modernising European Cinema Summit in Berlin. "We started out as art-house distributors and now we are street vendors."

Maltha has spent his precious Rings bonanza buying up library titles that are being re-issued in gorgeous new editions and making a quick killing as sell-through items. Unexpected DVD hits among his 700-title back-catalogue include a luxurious four-hour version of Dances With Wolves that was priced as high as Lord Of The Rings even though other versions were in circulation.

"The penetration is much quicker than with video and it's reaching a different audience because the people who like high-end product preferred to go the cinemas to see the films rather than see them on video," he said.

Echoing Maltha's views, Kinowelt's Rainer Koelmel pointed out that library product is what is driving the current DVD boom: "we have released 640 titles and only three of these in the top 10 have been new releases."

"For arthouse DVDs to be successful, you need to have a theatrical release. There is a clear correlation between the two," he argued.

However, independent arthouse titles have difficulty getting that all important shelf space in the shops. "The shops are too small and they concentrate on the top 10 product", Maltha noted, suggesting that new distribution channels such as sales via Internet and broadband offer alternative marketing possibilities. In fact, unless new avenues open up, Maltha sees the current DVD goldrush lasting perhaps three to five years more.

Meanwhile, producer Kees Kasander, who is aiming to have the London's Tate Gallery provide a screening showcase for Peter Greenaway's The Tulse Luper Suitcases, suggested that the DVD medium could form the base of an alternative distribution channel in the future. "Cinema has become more like a theme park with just big titles occupying most of the screens and there are so many films that are never seen in the cinemas. Forget cinema and go straight to DVD!"

By Kasander's estimates, there have been ten million visitors to the Tate Gallery in the last two years. If only a small percentage of those visit the 100-seat screening room to watch Greenaway's opus and then buy a DVD copy on their way out, "then that's a considerable audience."