2002 Rental Spending Starts Off With a Bang1 Feb, 2002 By: Melinda Saccone
Rental spending continued its torrid pace in 2002, in large part due to DVD.
Consumers spent $184.7 million on rentals for the week ending Jan. 27, up a strong 23.9 percent from spending in the comparable week in 2001.
Consumer spending on VHS and DVD rentals in the first four weeks of the year posted healthy gains over the same period last year thanks to the continued growth of DVD. In the first month of the year consumers spent $811.2 million at the rental counter -- up 17.6 percent from the first four weeks in 2001. While VHS rentals came in at $624.6 million -- up 3 percent from the $606.4 million spent in the first month of 2001 -- the majority of the growth is attributable to DVD. Year-to-date spending on DVD rentals tallied $186.6 million -- up 124.7 percent from the $83 million spent in the same period in 2001. DVD rentals now account for 23 percent of total rental spending, nearly doubling from the same period last year.
As demand for the DVD format continues to grow, more retailers are adjusting their product mix. According to an independent study conducted by Video Store Magazine market research, more than 90 percent of independent retailers carry DVD for rent, compared to 75 percent in Jan. 2001. On average, independent retailers stock 750 DVD units in their rental inventories compared to just 400 in January of last year. Preliminary results from Video Store Magazine's Top 100 Retailer Survey (to be published in April) show the majority of Top 100 retailers are planning to decrease the amount of VHS they carry for rent in the next 12 months and increase the amount of DVD they carry for rent.
Universal Studios Home Video's American Pie 2 was a winner at the rental and sales counter for the week. It was consumers' top DVD buy, according to VideoScan First Alert data, and remained the top rental choice for the week, earning an additional $15.35 million in combined VHS and DVD rental revenue.