Sellthrough Cannibalization Isn't Just About BuyingVersus Renting20 Jan, 2003 By: Stephanie Prange
An industry pundit once told me it isn't just the fact that people buy, rather than rent, a sellthrough title that hurts rentals, it is the fact the once consumers own a title, they can watch it over and over again. When a consumer watches a title in his or her library — say, The Lord of the Rings: The Fellowship of the Rings as I did this weekend — that consumer isn't renting a new title to view.
There is only so much entertainment time available to consumers, and sellthrough titles compete for that time not just on a one-to-one basis with a rental, but almost indefinitely. One a consumer buys a title, that title can compete with any rental going forward. If there's nothing particularly compelling at the video rental store, the consumer can always pull a title from an ever-growing library and watch that instead. Or, the ease with which a consumer can pull something from his or her own movie library could prove a tempting prospect when considering whether or not to get into the car and take the time to choose a movie rental.
Certainly, many consumers buy titles that they never watch more than once. Many buy titles just to have them in their library, without ever watching them at all. But as consumers' libraries grow, the chance that they will compete with the rental market grows as well.
In the end, it's not only Wal-Mart and other video discounters competing with the local rentailer, it's consumers' own libraries.