As Rentals Fall, So Falls Consumer Spending21 Sep, 2002 By: Melinda Saccone
New releases in August failed to stabilize the downward slide in rental spending, pushing year-to-date totals further into the red.
Despite a stellar fourth-quarter lineup, Video Store Magazine market research estimates that rental spending will fall below 2001 tallies, as historically nearly 70 percent of all annual rental spending is completed in the first eight months of the year.
VSM market research also estimates total combined rental spending will reach about $9.5 billion for the year. That compares with $10.03 billion spent in 2001.
Rental spending in August registered $730.6 million, down 14.7 percent from the $856.5 million consumers doled out during the comparable period in 2001. Triple-digit gains in DVD rental spending weren't enough to offset the erosion in VHS rentals.
In August, consumers spent $436.8 million renting VHS cassettes, down 40.4 percent from the $733.2 million spent during the comparable period in 2001, and down 9.6 percent from the previous month's tally. At month's end, VHS rentals accounted for 59.8 percent of all August rentals, down from 77 percent in January.
Meanwhile, DVD rentals continue to post triple-digit gains, but the rate of DVD rental growth is slowing. At month's end, DVD rentals accounted for 40.2 percent of all August transactions, up from 23 percent at the end of January. Consumers doled out $293.8 million renting discs in August, up 138.4 percent from the comparable period in 2001, but down from the 200 percent and 147 percent increases posted in June and July, respectively.
At the end of August, year-to-date spending on combined VHS and DVD rentals stood at $5.86 billion, down 7.2 percent from the $6.3 billion spent in the first eight months of last year.
Meanwhile, in the market share sweepstakes, Warner Home Video took top honors for the second time this year. The studio's releases accounted for 29.5 percent of all August rental transactions. Warner, which also distributes New Line and HBO product, had five releases among the top 25 rentals in August, including the No. 1 and No. 2 rentals for the month, both released at a sellthrough price on both VHS and DVD.
Leading for Warner was Collateral Damage. Prior to its video debut July 30, the actioner earned a middling $40 million in theaters, indicating many viewers might have been waiting to see it on video.
New Line Home Entertainment's The Lord of the Rings: The Fellowship of the Ring was the No. 2 rental for the month.
Universal Studios Home Video and Buena Vista Home Entertainment tied for the No. 2 spot in August market share, each earning 15.1 percent of the month's transactions. Both studios had four new releases among the top 25 rentals for the month.
Rounding out the top five suppliers for the month were Columbia TriStar (No. 4, 11.8 percent of transactions) and 20th Century Fox Home Entertainment (No. 5, 9.7 percent).
Comedies wrested the lead from dramas as the top-renting genre for the month, accounting for 28.8 percent of August rentals. Buena Vista Home Entertainment's The Royal Tenenbaums was the top-renting comedy for the month. Dramas came in a close second (24.3 percent of transactions), with New Line Home Entertainment's John Q. leading the genre.
Rounding out the top five renting genres for the month were actioners (No. 3, 13.2 percent of transactions), sci-fi (No. 4, 12.8 percent) and fantasy (No. 5, 8.4 percent).