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Holiday Player Sales Boost DVD Rentals for January

6 Feb, 2003 By: Melinda Saccone

Consumers spent $849.7 million on disc and cassette rentals in the first four weeks of the year, a 4.8 percent increase from the $811.1 million spent in January 2002.

Disc rentals posted a 125.2 percent increase from last year's tallies, with consumers spending $420.2 million renting the format in January.

The growth in rental spending can be attributed to the continued demand for DVD, as brisk holiday sales of DVD hardware spawned an increased demand at the rental counter. DVD rentals accounted for nearly half of all rental transactions for the month, more than doubling from 23 percent during the comparable four-week period in 2002.

Retailers have adjusted their inventories in response to the growing demand for DVD software. According to a recent survey conducted by Video Store Magazine market research, independent retailers reported more than 40 percent of new release purchases are on disc. This inventory swing favoring DVD will most likely continue, as the majority of retailers are planning to increase their new-release purchases on disc in 2003 while reducing cassette inventories.

As DVD establishes itself as the dominant format, it continues to be at the expense of cassette rentals. Consumer spending on VHS rentals continued to erode, posting a 31.2 percent decline over the comparable period last year. For the four-week period ended Jan. 26, VHS rentals were $429.5 million, compared with the $624.6 million spent during the comparable period in 2002.

Late December releases dominated at the rental counter in January, taking six of the top 10 spots on the top 10 rentals chart for the month. VSM market research estimates that these top 10 releases shipped nearly 13 million units into the rental pipeline, on a par with last year. However, DVD comprised nearly half of this year's shipments compared to just 30 percent in 2002.

Columbia TriStar Home Entertainment's Dec. 31 release XXX was consumers' top rental for the month. There were plenty of copies available for rent of the Vin Diesel starrer. VSM market research estimates that there were upwards of 1.5 million combined VHS and DVD units in the rental pipeline and that nearly 60 percent of the rental units were on disc. The actioner helped launch Columbia TriStar into first place in the market-share sweepstakes. With five releases in the top 25 rentals chart, Columbia TriStar earned 21.3 percent of all January rental transactions. Universal Studios Home Entertainment, which also distributes DreamWorks product, placed second in market share for the month, with 20.6 percent of rental transactions. The supplier had three releases in the top 10 rentals' chart, with two being January releases. Overall,Universal/DreamWorks had five releases in the top 25 rentals chart in January. Rounding out the top five suppliers for the month were Warner (No. 3, 18.3 percent), Buena Vista Home Entertainment (No. 4, 14.4 percent) and 20th Century Fox Home Entertainment (No.5, 10.5 percent).

Dramas ruled at the rental counter in January, with the genre accounting for 20.7 percent of all rental transactions. Thrillers placed a close second in market share, earning 19.9 percent of January transactions. Rounding out the top five genres for the month were sci-fi (No. 3, 16.2 percent), action (No. 4, 15.5 percent) and comedy (No. 5, 14.2 percent).

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