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DVD/VHS Rental & Sell Through - USProduct Type: Market Research ReportPublished by: Mintel International Group Ltd. Published: August 2005 Product Code: R560-453 Description As technology advances, the VCR and DVD market must not just remain stable, but continue to grow to maintain its hold in the industry. While retail video rentals have dropped some 10% from 2004, the introduction of online rental services poses a serious threat. In just one year (August 2004 to August 2005), Blockbuster’s online rental service has grown to 1 million subscribers. Its main online service competitor, Netflix, has 3 million subscribers.
DVD-player ownership quadrupled from 2000 to 2002 and nearly doubled in 2004. Nearly one-fifth of surveyed consumers reported having at least three DVD players per household, showing that this technology is the new standard, and many consumers want a DVD player for each television set. Intriguing findings include:
For the purposes of this report, Mintel defines the video market as the market for pre-recorded VHS video and DVD products, both rentals and purchased. Sales of pre-viewed VHS by rental shops are included, while sales of used products between consumers are not. Internet subscription services are included in this report. Sales of Universal Media Disc and mini-DVDs are not included in this report. This report also excludes blank recordable videos and DVDs, audio CDs, DVDs, and computer software. Hardware is not included in sales figures for this report. Table of Contents Introduction and Abbreviations Introduction Other relevant reports Definition Abbreviations and terms Abbreviations Terms Executive Summary A maturing market DVD sell-through carries majority of the market Increases in hardware penetration drove sales Demographic and economic factors positive for market Tightly controlled supply stream Suppliers foot advertising bills Wal-Mart, Target, Best Buy, Blockbuster head distribution Internet subscription rental service growing rapidly Three-quarters of consumers participate in the market Theater attendance important to sales VoD and DVR to hurt rentals HD-DVD to provide limited support in 2006 Theatrical release windows continue to shrink Increased piracy looming Continued growth of DVD sales and rentals Market Drivers Hardware penetration DVD and VCR households Figure 1: U.S. household penetration of DVD and VCR players, 2000-04 Multiple-unit DVD and VCR households Figure 2: Ownership of multiple VCR & DVD players, 2000-04 TV format penetration Figure 3: Penetration of various TV models per household, in the U.S., 2002 and 2004 Home theater audio system households Figure 4: Penetration of home theater audio systems, 2001-04 Portable DVD hardware Content Competition with other media for consumer time Figure 5: Hours spent on various media, average consumer, annual projections, by media type, 2003-07 The battle for convenience—DVD vs. DVR and VoD Release dates Population characteristics Youth participation Figure 6: U.S. population, by age, 2000-10. The impact of changes in racial/ethnic populations Figure 7: U.S. population, by age and race/Hispanic origin, 2005 Distribution of income in the U.S. Figure 8: Number of households per income group, 2000 and 2003 Figure 9: Graph: Households per income group in 2003 and change from 2000 Piracy Market Size and Trends Overview Figure 10: Total U.S. retail sales and rental of video software, at current and constant prices, 1999-2005** Figure 11: Graph: Total U.S. retail sales of video software, at current prices, 1999-2005 Shipments and sales per unit Figure 12: Total shipments to U.S. retailers of video software and average sales per unit, 2000-05 The impact of lower rental prices Market Segmentation Introduction Figure 13: Sales of home video software, segmented by rental and sell-through, by format, 2003 and 2005 Figure 14: Graph: Sales of home video software, segmented by rental and sell-through, by format, 2005 Figure 15: Graph: Trends in sales of home video software, segmented by rental and sell-through, by format, at current prices, 1999-2005 Rental sales Figure 16: Sales of home video software rentals, at current and constant prices, 1999-2005 Figure 17: Graph: Sales of home video software rentals, at current prices, 1999-2005 Figure 18: VHS rental revenue, at current and constant prices, 1999-2005** Figure 19: Graph: VHS rental revenue, at current prices, 1999-2005 Figure 20: DVD rental revenue, at current and constant prices, 1999-2005** Sell-through sales Figure 22: Sales of video software sell-through, at current and constant prices, 1999-2005** Figure 23: Sales of video software sell-through, at current prices, 1999-2005 Figure 24: VHS sell-through revenue, at current and constant prices, 1999-2005** Figure 25: Graph: VHS sell-through revenue, at current prices, 1999-2005 Figure 26: DVD sell-through revenue, at current and constant prices, 1999-2005** Figure 27: Graph: DVD sell-through revenue, at current prices, 1999-2005 Supply Structure Figure 28: Supplier sales of video software in the U.S., 2003 and 2005 Advertising and Promotion Advertising Retailers Studios Figure 29: Video software advertising in the U.S., 2004 Promotions and partnerships Retailers Studios DreamWorks’ Shrek II received promotional aid in the form of $2 coupons for Croissanwiches from Burger King in packages of DVD and VHS copies of the movie; Burger King was the promotional partner for the theatrical release as well. The fast food chain f Retail Distribution Overview Preferred retail locations for purchase/rental Source of purchases by adults Figure 30: Preferred retail locations for DVD purchases by adults, 2002 and 2004 Figure 31: Preferred retail locations for DVD purchases, by age, January-September 2004 Source of purchases by teens Figure 32: Preferred retail locations for DVD purchases by teens, 2002 and 2004 Choice of rental location by adults Figure 33: Preferred retail locations for DVD rentals by adults, 2002 and 2004 Figure 34: Preferred retail locations for DVD rentals by age, January-September 2004 Online rental subscribers and buyers Choice of rental location by teens Figure 35: Preferred retail locations for DVD rentals by teens, 2002 and 2004 Video Specialists Blockbuster, Inc. Blockbuster demographics Movie Gallery/Hollywood Entertainment Movie Gallery/Hollywood Entertainment demographics Independents Mass merchandisers and warehouse clubs Wal-Mart Wal-Mart demographics Target Target demographics Kmart Costco Sam’s Club Online retailers Netflix Figure 36: Subscriptions and revenue for netflix, 2000-04 Amazon.com Electronics stores Best Buy, Inc. Best Buy demographics Circuit City Stores, Inc. Music and book specialists Musicland (Sam Goody, Media Play) Trans World Entertainment Hastings Entertainment, Inc. Borders Books and Music MTS (Tower Records) Supermarkets Mail order The Consumer Introduction Market participation Figure 37: Incidence of VHS or DVD rental or purchase in the previous 12 months, topline and by age, January-September 2004 Figure 38: Incidence of VHS or DVD rental or purchase in the previous 12 months, by household income, January-September 2004 Figure 39: Incidence of VHS or DVD rental or purchase in the previous 12 months, by presence of children and marital status, January-September 2004 Figure 40: Incidence of VHS or DVD rental or purchase in the previous 12 months, by race/ethnicity, January-September 2004 Figure 41: Incidence of VHS or DVD rental or purchase in the previous 12 months, by cohorts, January-September 2004 Activity correlations Figure 42: Activities correlated to home video software purchases and rentals, January-September 2004 The relationship between cinema attendance and home video participation Figure 43: Incidence of VHS or DVD rental or purchase in the previous 12 months, and cinema attendance in the previous six months, January-September 2004 Figure 44: Cross-analysis of incidence of VHS or DVD rental or purchase in the previous 12 months, January-September 2004 Teen participation in video software market Figure 45: Incidence of teen VHS or DVD rental or purchase in the previous 12 months, by age and gender, January-September 2004 Child participation in video software market Figure 46: Incidence of children’s VHS or DVD rental or purchase/gift in the previous 12 months, by age and gender, January-September 2004 Frequency of DVD purchases or rentals Figure 47: Number of DVDs purchased/rented, by selected demographics, January-September 2004 Frequency of consumption by cohort Frequency of consumption among teens How rental activity compares to purchasing activity for DVDs Preferred content Adults Figure 48: Types of home video product rented or purchased by adults, January-September 2004 Teens Figure 49: Types of home video product rented or purchased by teens, January-September 2004 Selection of content by or for children Figure 50: Whether child picks out movies rented, by gender and age, January-September 2004 Subscription to an Internet service Heavy vs. light users of home video software Figure 51: Heavy and light users of home video product, topline and by age, June 2005 Figure 52: Heavy and light users of home video product, by household income, June 2005 Attitudes towards home video compared to competing forms of entertainment Figure 53: Attitudes towards home video software in relation to competing forms of entertainment, topline and by age, June 2005 Other significant demographic results Attitudes of heavy users compared to light users Figure 54: Attitudes towards home video software in relation to competing forms of entertainment, by heavy/light buyers, June 2005 Figure 55: Attitudes towards home video software in relation to competing forms of entertainment, by heavy/light renters, June 2005 Attitudes towards video content Figure 56: Attitudes towards home video content, topline and by age, June 2005 Other significant demographic results Attitudes towards purchasing DVDs Figure 57: Attitudes towards purchasing home video product, topline and by age, June 2005 Other significant demographic results Attitudes towards downloading films Figure 58: Attitudes towards purchasing home video product, by heavy vs. light buyers, June 2005 Figure 59: Attitudes towards purchasing home video product, by heavy vs. light renters, June 2005 Attitudes towards the quality of feature film content Figure 60: Attitudes towards quality of content, by level of software consumption, by heavy vs. light buyers, June 2005 Figure 61: Attitudes toward quality of content, by level of software consumption, by heavy vs. light renters, June 2005 Summary Future and Forecast Future trends Piracy Combating piracy HD-DVD Impact of DVR Impact of VoD Legal downloads (IPVoD) DVD hardware penetration growth to slow Prices to decline under onslaught of piracy and digital delivery Uptake of broadband to fuel Internet sales Tinkering with release windows Demographic change MARKET FORECAST DVD rental Figure 62: Forecast of U.S. DVD rental revenue, at current and constant prices, 2005-2010 DVD sell-through Figure 63: Forecast of U.S. DVD sell-through revenue, at current and constant prices, 2005-2010 Forecast Factors Appendix: Trade Resources Appendix: Cohort Definitions Appendix: Research Methodology Consumer Research Sampling & Weighting Technometrica TechnoExpresssm ICR Surveys EXCEL Simmons National Consumer Surveys Greenfield Online Presentation & Definition Further Analysis Trade Research Informal trade research Formal trade research Desk & Internet Research Sources Definitions Forecasts |
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