NEW YORK (CNN/Money) - This year consumers are set to have a DVD Christmas.

Digital video discs and DVD players are among the hottest selling items, giving Hollywood studios, electronics manufacturers and retailers a shot in the arm unlike anything they've ever seen.

Tom Edwards, analyst with NPDTechworld, estimated that about 22.5 million DVD players will be sold this year. He said this is far more than the video cassette recorders' best year, when 18 million VCRs were sold.

And with the growing popularity of DVD players, consumers are buying movie titles and boxed sets of their favorite television series in numbers never even approached by video tapes, which traditionally have been a rental rather than purchase market. The biggest hits of 2002 such as "Spider-man" and "Star Wars Episode II" actually are having bigger first-week DVD sales than they did at the box office in their opening weekends.

"Certainly the senior studio execs are startled by how successful the format has been," said Peter Winkler, director of the entertainment and media practice at PricewaterhouseCoopers. "It's generating a lot of new money they didn't expect to be out there."

Another factor boosting DVD sales compared with video tapes is the absence of a so-called "rental window" when a movie first becomes available on DVD. Traditionally, in order to boost rentals of movies on tape, studios have "rental window" agreements with video rental stores that keep the prices of movie videos high to consumers for the first month or two they are available. In return, the studios get a cut of the video rental revenues.

But that window never developed for DVDs, putting prices in the $20 to $30 range rather than the $80-$100 range of early VHS releases. Consumers are responding by buying more DVDs than they ever did VHS movies.

"We taught people to rent VHS," said Jim Cardwell, executive vice president of Warner Home Video. "With DVDs, we're teaching them to buy."

Some movie studios would like to see rental windows for DVDs. Their concern is that they're losing the rental revenue as well as the ability to force video rental chains to take some of the less-successful titles for rental as part of the agreement.

But the video rental chains are just as happy to be free of the revenue sharing agreements, even if it means they lose rental opportunities for some hot titles. Major general retailers, such as Wal-Mart Stores Inc. and Target Corp., also would be opposed to a DVD rental window, since they want to offer the movies for sale as soon as they're available in rental stores.

"The DVD sell-through market is big business," said Stacey Widlitz, analyst with S.G. Cowen Securities. "The studios are not going to jeopardize the Wal-Mart channel."

Peter Winkler, director of entertainment and media practice at PricewaterhouseCoopers talks about big business of DVDs. Play video (QuickTime, Real or Windows Media)

So in the first six months of the year, U.S. DVD sales reached $3.05 billion, according to industry publication Video Business, up 80 percent from the same period a year ago, and almost twice the $1.55 billion in VHS sales during the first half this year.

Some of the early projections for full-year DVD sales of $7.2 billion now appear to be too conservative. And these modest projections suggest DVD sales will surpass total box office revenue as soon as 2004, despite continued growth in movie ticket sales.

DVD players still are in only an estimated 38 percent of homes, but that's a very high penetration rate considering the machines weren't widely available until 1997. It took VCRs, now in more than 90 percent of U.S. homes, about 15 years to reach that level of penetration, NPDTechworld's Edwards said, and it will take only a few more years for DVD players to reach 70-80 percent of households.

Much of this is due to the relatively low cost of DVD players, which have a median price in the $130 range. They are one of the top products this holiday shopping season for electronics retailers such as Best Buy Co. (BBY: Research, Estimates) and Circuit City Stores Inc. (CC: Research, Estimates), as retailers are using them as a traffic generator to get customers into the stores.

"You've seen huge growth in units, but very substantial price compression, dollar growth more limited," said R. Scot Ciccarelli, retail analyst with Gerald Klauer Mattison & Co. "You can advertise them at a low price, and make them a great traffic generator. And if you can sell them [customers] two to three titles, then you can get a profitable sale." Ciccarelli said he expects that some DVD players will be going in the $50 range in the Thanksgiving sales weekend.

Sales of an estimated 7 to 10 million new DVD players in November and December probably will result in sales of even more DVD movie titles in 2003.

"The first quarter will be phenomenal," Edwards said.

But there is one dark cloud looming on this bright horizon, and that's the risk of piracy. The DVD format is much easier to copy in bulk than are VHS tapes. Bernstein analyst Tom Wolzein said that just as piracy has led to a noticeable decline in the sale of music CDs, it eventually could lead to decline in DVD sales once the market matures.

"We're just at the cusp of massive piracy problems," Wolzein said. "We've seen a 25 percent drop in global music sales in 5 years, and the bulk of that decline is from piracy. This is not a crisis for this year. But just as DVDs are seeing massive success for the companies, there's also initial warning signs."