Monthly Rental Spending Tops $1B in August11 Sep, 2003 By: Melinda Saccone
Monthly video rental spending shot past the $1 billion mark in August for the first time this year as late-summer blockbusters hit rental shelves.
Hot new August releases such as New Line Home Entertainment's The Lord of the Rings: The Two Towers, and Buena Vista Home Entertainment's Bringing Down the House and Chicago helped catapult consumer rental spending to $1.07 billion for the five-week period ended Aug. 31, up 16.3 percent from the comparable five-week period last year.
DVD Drives Rental Growth
Disc rentals soared to 59 percent of monthly transactions as consumers' preference for the format continues to grow. By comparison, at this time last year, disc rentals accounted for 40 percent of the monthly take.
Consumers spent $631 million renting discs in August, up 69.2 percent from the comparable five-week period in 2002.
So far this year, disc rentals have generated $3.6 billion, up 81.5 percent from the first 35 weeks in 2002.
VHS Rentals Lag
Meanwhile, cassette rentals continue to decline as late adopters transition to disc.
Consumer spending on VHS rentals dropped from 59.6 percent of August rentals in 2002 to 41.2 percent of August rentals this year.
VHS rental spending posted a 19.6 percent decline from comparable spending in 2002. However, consumers still spent nearly half a billion ($442.9 million) on cassette rentals in August alone.
Year-to-date tallies peg VHS rental spending at $3.1 billion, down 24.2 percent from the comparable period last year.
August Debutantes Dominate
The August release slate proved to be a favorable lot at the rental counter as 11 new releases debuted on the top 25 rentals chart for the month.
Three of the August debutantes earned more than $100 million in theaters prior to their video debut, which translated into solid performances at the rental counter.
Headlining for these theatrical blockbusters was Buena Vista's Bringing Down the House, which earned $49 million in its first 26 days on rental shelves, giving it a first-place overall finish. Chicago, also from Buena Vista, finished in fifth, earning $32.8 million in just two weeks of release.
New Line's Two Towers, which was released Aug. 26 and holds the record for first-week earnings, placed at No. 11, with $22.9 million.
Collectively, the 11 debs to appear on the top 25 rentals chart generated $309.8 million, accounting for more than half (51 percent) of the total rental revenue generated by the top 25. By comparison, last year's newbies (there were 10) accounted for just 32 percent.
Rentailers Buy Record Number of New Releases
Rentailers brought August blockbusters into their stores in record numbers, knowing they can retire inventory to the selloff bin.
Collectively, nearly 20 million copies of the August debuts were shipped into the rental pipeline, up 24 percent from their 2002 counterparts with slightly more than 60 percent in the DVD format, according to Video Store Magazine market research.
By comparison, DVD shipments accounted for less than 40 percent of total rental units in August 2002.
Leading the August new release slate was New Line's Two Towers, which shipped a record-breaking 2.5 million units into the rental pipeline, according to Video Store Magazine market research estimates.
Buena Vista Tops Rental Market Share
While Buena Vista has historically been one of the frontrunners in the market-share sweepstakes, for the first time this year the studio won the market-share battle on the rental front. Buena Vista grabbed 23.6 percent of the monthly transactions for a first-place win.
Warner Home Video, which distributes New Line and HBO, scored a second-place berth with an 18.5 percent market share.