The Future of Video Rental: Industry Report

The Future of Video Rental

Product Type: Market Research Report
Published by: Screen Digest
Published: April 2005
Product Code: R261-034

Description

Traditional video rentals in the US plunged more than 20% from their 2001 peak to 2004 and retailers are scrambling to adapt. Can stores get revenue growing again with subscription plans, games sales, rentals and expansion of their share of the robust DVD sales market?

As established video rental business models come under attack, we have expanded our own model of the video business to analyse the potential revenue and profitability of video stores and online rental services in the decade ahead. Find out:

How big can the subscription rental business become?
What will be the impact of online rentals, VOD and movie downloads?
Can used DVD sales carve out a significant chunk of the business?
Can video stores capture a significant piece of sell-through in the years ahead?
How big a factor will games be in the future of video stores?
What would be the impact on the business of Hollywood's sales to Blockbuster? To Movie Gallery?

Despite its recent declines, renting a video is still America's favourite way to watch a movie, as evidenced by the comparison of annual rental turns vs box admissions, video sales and VOD/PPV rentals below. By building on existing strategies and undertaking new ones, video rental stores can reinvent themselves yet again.

Table of Contents

Index to Figures

Executive Summary

I History

II The Subscription Revolution

III The Rental Store of the Future

IV The Changing Retail Marketplace

V New Technology: Threats & Opportunities For Retailers

VI Video Rental's Impact on Studio Economics

VII Findings From the AMR Video Model

Appendix A: Traditional and Subscription Rentals

Appendix B: The Video Store of the Future: Video Store Revenue Components

Table of Figures

Executive Summary

Total US Rental Transactions

Box Office Annual Admissions v Admissions per Household

2004 Total Movie Transactions

I History

Comparison of Consumer Propositions

Studio Rental Revenue v Video Households

Consumer Rental Spending v Retailer Gross Profit

Studio Participation Percentage of Consumer Spending

Studio Revenue Comparison

Consumer Spending Rental v Supplier Revenue 1995-2004

Points of Diminishing Returns

Year-Over-Change: Spending v Supplier Revenue

II The Subscription Revolution

Pay TV Subscription v ALC

Revenue Scenarios from ALC and Subscription

Subscription Video Rental Consumer Propositions

Availability Comparison by Company

Payback on Cost of Acquiring One Subscriber

ALC v Subscription Spending

Video Rental Subscriptions

III The Rental Store of The Future

A Future Revenue Scenario

Big Three Game Rentals as a % of Total Rental

Video Store Game Revenue

Video Store Sell-Through Revenue Potential

Music Retailer Market Share

Book Retailer Market Share

Video Game Sales Retail Market Share

Sell-Through Video Market Share

IV The Changing Retail Marketplace

Packaged Video Spending 2004

Rental Outlets By Store Type 2003

2003 Video Rental Market share

Rental Retail Market Share by Store Type 2003

Super-Store Gains in Market Share

The Shift Toward Super-Stores: Store Counts

Top Video Rental Outlet Comparison

V New Technology: Threats & Opportunities for Retailers

The Rise of Sell-Through

Consumer Propositions

VOD v DVD Households

"Virtual VOD" v Cable VOD

Studio ALC Revenue

Studio Revenue From Competing Windows

VI Video Rental's Impact on Studio Economics

The Future of Supplier Revenue

Home Video Spending And Supplier Revenue

Total Video Rental Revenue by Box Office Range

Average Rental Performance by Box Office Range - First Quarter 2002

Average Rental Performance by Box Office Range - Second Quarter 2002

Average Rental Performance by Box Office Range - Third Quarter 2002

Average Rental Performance by Box Office Range - Fourth Quarter 2002

DVD % of Total Rental Revenue - Fourth Quarter 2002

Average Rental Performance by Box Office Range - First Quarter 2003

Average Rental Performance by Box Office Range - Second Quarter 2003

Average Rental Performance by Box Office Range - Third Quarter 2003

Average Rental Performance by Box Office Range - Fourth Quarter 2003

DVD % of Total Rental Revenue - Fourth Quarter 2003

Average Rental Performance by Box Office Range - First Quarter 2004

Average Rental Performance by Box Office Range - Second Quarter 2004

VII Findings From the Video Model

Media Consumption Over Time

VHS v DVD: Annual Per-HH Rentals In Comparable Years

Appendix A: Traditional and Subscription Rentals

VHS Rental History 1981-1994

VHS Rental History & Projections 1995-2008

DVD Rental History 1997-2003 with Estimated 2004

DVD Rental Projections 2005-2013

Total DVD Rental & Total Video History 1997-2003 with Estimated 2004

Total DVD Rental & Total Video Projections 2005-2013

Appendix B: The Video Store of the Future

Video Store Movie Revenue Components: History & Projections 1997-2005

Video Store Movie Revenue Components: Projections 2006-2013

Video Store Movie Totals & Game Revenue Components: History & Projections 1997-2005

Video Store Movie Totals & Game Revenue Components: Projections 2006-2013

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