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New Reports Portend Rental Slowdown

7 Jul, 2004 By: Jessica Wolf

Two new reports point to a potential downturn in DVD rentals, even though overall spending on home entertainment stands to increase over the next few years.

The “Global Entertainment and Media Outlook Report: 2004-2008” from Pricewaterhouse Coopers predicts global spending on filmed entertainment will increase at a 7.5 percent annual rate, to hit $108 billion in 2008. The report predicts the overall home video market in the United States will increase 5.3 percent annually, to reach $31.6 billion in 2008.

But that growth won't necessarily be in rental, the report cautions: “The surging popularity of DVD, together with shorter release windows, will fuel home video sellthrough at the expense of traditional rentals.”

Another report, from ChangeWave Research, points to early technology adopters shifting away from traditional rentals and toward alternate content delivery methods.

ChangeWave surveyed 4,000 early adopters, and although 32 percent said they planned to rent more DVDs this year than last, 13 percent said they would rent less.

Of that 13 percent, 12 percent said they would rent less because they are watching more pay-per-view; 9 percent said they are using personal video recorders to gather and watch movie content; 6 percent said they are watching more video-on-demand; and 1 percent cited the fact that they are using VOD services as the reason for fewer rentals. The No. 1 answer among early adopters who said they would cut down on DVD rentals, though, at 42 percent, was that they are not as interested in movies anymore.

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