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Hit Rentals Bigger Than Ever, But They Have Shorter Legs

22 Aug, 2003 By: Melinda Saccone

Revenue-sharing and low-priced DVDs have penetrated the market with unprecedented levels of rental product, creating a burgeoning “hits” rental business, at the expense of secondary titles, and making for shorter runs on the video rental shelf for those same box office blockbusters.

Over the past five years the number of rental copies in the marketplace for the top 10 releases has nearly doubled from 8.9 million units in 1998 to nearly 16 million last year, according to Video Store Magazine market research.

The flood gates have opened and rentailers have profited. Unit shipments for the top 10 rentals for the first half of 2003 have already surpassed last year's total. VSM market research estimates the top 10 rentals shipped 15.6 million units into the rental pipeline, up a slight 0.7 percent from the 2002 year-end total.

In the past five years, average turns per copy of top 10 rentals has been cut in half as depth of copy has satiated consumer demand more rapidly. In 1998, each copy of the top 10 performers collectively turned an average 25.1 times during the first four months in release. By the end of 2002, the average turns per copy for the top 10 rentals had fallen to 12.7. By the end of the first half of 2003, the top 10 rentals averaged just 10.2 turns per copy.

The increase in title availability has allowed consumers' preference for big box office hits to be satisfied more quickly, evidenced by the escalation in rental revenue generated by the top rental performer. In the past five years, consumers have increased their rental spending on the top hits by 58 percent.

Meanwhile, secondary titles have suffered as the top 10 releases have grown to account for an increasingly larger portion of the rental pie.

At the end of the first half of this year, revenue generated by the top 10 rentals accounted for 14.5 percent of total rental revenue. By comparison, the top 10 rentals in 1998 accounted for just 6 percent.

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