Holiday Sales Season Puts Crimp in November Rentals9 Dec, 2004 By: Melinda Saccone
Rental demand remained soft in November as consumers flocked to the sales counter for some of the year's hottest new releases.
The strong release slate for the month did not translate into demand at the rental counter. Consumer spending on transactional rentals for the four-week period ended Nov. 28 hit its lowest level so far this year. Consumers spent less than half a billion ($497 million) at the rental counter — off 8.1 percent from comparable transactional spending in 2003.
What transactional rentals lost, previously viewed title sales harvested. Consumers spent more than $200 million purchasing previously viewed titles in November.
The additional revenue from PVT sales launched monthly spending to $713.9 million, 10.6 percent more than comparable spending in 2003 with PVT sales revenue added to the mix.
Historically, studios release some of their strongest titles in November in time for the holiday buying frenzy. This year, many will be fighting for shelf space, as the lineup is stronger than ever with four of the top grossing theatrical films of 2004 debuting on DVD: DreamWorks Home Entertainment's Shrek 2 (Nov. 5), Sony Pictures Home Entertainment's Spider-Man 2 (Nov. 30), Warner Home Video's Harry Potter and the Prisoner of Azkaban (Nov. 23) and New Line Home Entertainment's Elf (Nov. 16).
November debuts generated $1.55 billion in theaters, up 16.4 percent from the box office punch of their 2003 counterparts. Many studios have upped their holiday release schedule, as expectations for a strong “fifth quarter” are light. The “fifth quarter,” an industry term for the period after Christmas when consumers with new DVD players look to build their DVD libraries, will likely not be as strong this year as DVD household penetration has already reached the masses.
Lagging rental demand spawned by high sales sent new releases to the selloff bin at a record pace. Two November releases were in selloff bins in sufficient quantities to warrant a spot on the top 10 PVT sellers chart: DreamWorks' Shrek 2, which earned $3.6 million in PVT sales and was the No. 2 PVT seller for the month, and Paramount Home Entertainment's The Stepford Wives, which earned $2.1 million in PVT sales to place No. 10.
Warner Home Video, which also distributes New Line and HBO titles, took top honors in the monthly market share sweepstakes, edging themselves closer to a year-end win. The studio's releases accounted for 15.9 percent of all monthly transactions and generated nearly $80 million in rental revenue.
Universal placed a close second with 14.9 percent of the monthly take. Rounding out the top five were Fox (No. 3, 13.3 percent), Sony (No. 4, 12.1 percent) and Buena Vista (No. 5, 10.4 percent).