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IHS: Blockbuster Closings Hurting U.K. Disc Rental Market

23 Apr, 2013 By: Erik Gruenwedel, Chris Tribbey

The United Kingdom Blu-ray Disc and DVD rental market could drop as much as 22% in 2013, due to half of the Blockbuster stores closing there, according to a new report.

IHS reports that by the end of the year, only 264 Blockbuster stores will remain in the United Kingdom, compared with 530 in 2012. That will drop the U.K. physical rental market to £202 million ($307.9 million), down from £259 million ($394.8 million) in 2012. If those figures hold, it’ll be the sharpest decline in disc revenue in the U.K. ever.

“The year 2013 is set to become a watershed for the U.K. video rental market as a result of the wholesale closure of Blockbuster U.K. stores,” said Tony Gunnarsson, senior video analyst at IHS. “The massive downturn in the store-based video rental market represents a significant loss to the video market and will result in a major decline and radical transformation of the U.K. video market overall. From 2013 on, the U.K. physical-video rental business increasingly will be dominated by online rent-by-mail subscription services.”

DVD rentals are expected to drop more than 53% in 2013 to 15.4 million units, while Blu-ray is expected to drop 61.3% to 2.8 million rental units.

In 2012 rental stores accounted for 41.3% of the video rental market, but that’s expected to drop to 24.7% this year, IHS reported. That’s because the online rental market is taking over, gaining a 75.3% share this year, compared with 59.7% in 2012.

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