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Signs for Q4 Look Good

10 Oct, 2005 By: Kurt Indvik

We've just entered into the much-anticipated fourth quarter, and, in general, the mood seems positive, both from the sellthrough and the rental sides. Even the stalled introduction of a next generation high definition disc until the first half of 2006 offers a silver lining, allowing studios and retailers the chance to focus attention on making the most of this all-important quarter.

The studios aren't holding much back, and in the next three month's we'll see nine $100 million+ box office hits land on retail shelves, six alone in November, including Star Wars: Episode III — Revenge of the Sith, War of the Worlds and Charlie and the Chocolate Factory. These tentpole sellthrough titles will fuel a lot of consumer appetite for home entertainment.

Meanwhile, however, there will also be a surfeit of titles in the rental friendly $10 million to $75 million box office range, including Bewitched, Kingdom of Heaven, Cinderella Man and many others. “We are optimistic that we may see a reversal of the third quarter rental decline,” said Steve Hicks, VP of product for Hastings Entertainment, in this week's issue of Home Media Retailing.

And, of course, many of those titles are also ripe for previously viewed sales. In a recent survey by Home Media Retailing, 98 percent of responding rentailers say they sell previously viewed titles, a phenomenon borne in the era of DVD. This same survey showed that rentailers continue to try and maximize ancillary product and service revenue streams. Eight-five percent sell candy and other such merchandise; 52 percent offer disc repair services; 37 percent sell and/or rent games and accessories; 26 percent sell and/or rent hardware; a surprising 18 percent offer tape-to-disc transfer services.

All signs point to an upswing in business this quarter. Send me a note and let me know how your business fares as we progress through these next three months.

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