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Rentrak: Rental Spending Flat in 2004

8 Jul, 2005 By: Erik Gruenwedel

Strong and steady DVD sales contributed to a decline of $30 million, or less than 1 percent, at the rental counter in 2004, according to the 2005 Annual Report just released by Rentrak Home Video Essentials.

For the year, consumers rented 2.59 million units (1.75 million DVD, 840,000 VHS), generating $8.06 billion in revenue. In 2003, 2.65 million units were rented (1.23 million DVD, 1.41 million VHS), generating $8.09 billion.

In 2004, DVD rentals increased 39 percent, to $5.73 billion, from the previous year's $4.11 billion. However, VHS rentals dropped 42 percent, to $2.32 billion — comparable to 2002 revenue — from $3.97 billion in 2003. DVD represented 71 percent of rentals compared to 49 percent in 2003.

Buena Vista Home Entertainment edged Warner Home Video by 0.43 percent to top studio rental market share, with 17.65 percent, according to the report. Universal Studios Home Entertainment snagged 14.05 percent rental market share for third place, followed closely by Sony Pictures Home Entertainment at 13.74 percent.

The Rentrak report named online rental pioneer Netflix, with more than 3 million subscribers, as the savior of the rental business in 2004, followed by Blockbuster Online.

It claimed the rental market is “no longer being molded from top down,” but instead from the ground up through new media technologies and accompanying consumer interests.

“With DVD sellthrough comfortably reaching the point of saturation … and visible investments being made into the online rental business, has the prospect of DVD ownership finally met its match?” the report asked.

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