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July Rental Spending Falls From 2001 Despite DVD Growth

22 Aug, 2002 By: Melinda Saccone

July consumer spending on combined VHS and DVD rentals reached its highest levels since March, thanks to strong product in the rental marketplace and the continued growth of DVD.

However, rental spending continues to lag behind the comparable period last year.

Consumers spent a combined $803.1 million at the rental counter for the four-week period ended July 28 -- up 4.2 percent from the previous month, but down 12.2 percent from the comparable four-week period in 2001.

Driving spending into the red is the continuous decline in VHS rentals. Consumers spent 40.3 percent less on VHS rentals in July than they did during the comparable four-week period in 2001. July VHS rentals totaled $483.4 million.

Higher DVD rental spending, meanwhile, wasn't enough to offset the VHS decline.

Consumers doled out $319.8 million renting discs in July, the highest monthly level so far this year. At month's end, DVD rentals accounted for nearly 40 percent of total monthly spending -- up from 23 percent at the beginning of the year.

According to a survey conducted by Video Store Magazine market research, 97 percent of independent retailers currently carry DVD for rent, compared to 78 percent in July 2001.

The same survey shows independent retailers on average have increased their new-release purchases of DVDs to 35.8 percent of the total buy, up from 14.2 percent in August of last year. The average independent retailer now carries nearly 1,200 DVDs in its rental inventory.

Meanwhile, Buena Vista Home Entertainment took the lead in the market-share sweepstakes for the first time this year, with 22.2 percent of all rental transactions in July. The studio had six titles among the top 25 July rentals, more than any other studio.

Leading Buena Vista into its first-place finish was BV/Touchstone's The Royal Tenenbaums. The comedy, released on video July 9, earned a fair $52.4 million in theaters, indicating some consumers may have waited to view the Oscar-nominated film on video.

Other Buena Vista releases among the top 25 rentals chart for July were Kate and Leopold (No. 12), The Shipping News (No. 15), Am?lie (No. 18), Impostor -- The Director's Cut (No. 19) and Max Keeble's Big Move (No. 21).

Warner Home Video placed second in the market-share sweepstakes, with 18.2 percent of July rental transactions. The studio, which distributes New Line and HBO product, had five releases among the month's top 25. The leading July title for Warner was New Line Home Entertainment's John Q. (No. 6). Universal Studios Home Video fell to No. 3 in the market-share sweeps, with 16 percent of July rental transactions, after dominating the rental counter for the first half of the year. Universal's top rental for the month was the Oscar-winning A Beautiful Mind (No. 2).

Rounding out the top five in the July supplier market-share sweeps were MGM Home Entertainment (No. 4, 10.1 percent) and 20th Century Fox Home Entertainment (No. 5, 9.8 percent).

Dramas led in the genre share sweepstakes for the third consecutive month, accounting for 40.2 percent of July rental transactions. Universal's A Beautiful Mind was the top-renting drama for the month. Comedies placed a close second, with 38.4 percent of July rental transactions, with The Royal Tenenbaums not only the top-renting comedy for the month but the top rental as well.

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