September Rentals Drop to Lowest Level This Year21 Oct, 2004 By: Melinda Saccone
September was a difficult month for rentailers, as inclement weather and pressure from consumer sales stifled rental demand.
September rental spending dropped to its lowest levels so far this year, posting double-digit declines from 2003 tallies for the fourth consecutive month.
The light fare of new releases, due to studios avoiding competition with 20th Century Fox's The Passion of the Christ (Aug. 31), coupled with hurricane mania in the Southeast, dampened consumers draw to the rental counter in September. Consumer rental spending fell to $542 million, down 34 percent from the comparable period last year.
The box office strength of new releases for the month was off nearly 16 percent from their 2003 counterparts, and not a single new release broke the $100 million mark in theaters, compared to two big hits last year.
The sellthrough nature of two of the month's biggest releases — Warner Home Video's Scooby-Doo 2: Monsters Unleashed (No. 14) and Buena Vista Home Entertainment's Home on the Range (No. 28) — did not help the rental cause.
While rental spending continues to track well below 2003 tallies, the sellthrough market continues to flourish, thanks to consumers' voracious appetite to collect DVDs.
Although rentals are down, many rentailers are banking on their ace in the hole — the previously-viewed title (PVT) market — to tap into consumers' collecting fever. In September, consumers spent $175 million purchasing PVTs, according to Video Store Magazine Market Research estimates. Previously viewed sales were up 44 percent from comparable 2003 sales.
Although PVT sales are helping to recoup core rental losses, they have not been able to completely offset the decline as consumers choose to buy rather than rent. New releases are finding their way to the selloff bins after less than a month on rental shelves. Consumers can find even the biggest hits just a few weeks after their rental bow. Warner Home Video's Starsky & Hutch was consumers' top buy in the previously viewed lineup for the month. Fox's The Passion of the Christ, released on the last day of August, was already in selloff bins in sufficient quantities to make it the No. 5 selling PVT release in September.
Buena Vista Home Entertainment proved to be king of the rental counter for the third consecutive month. The studio's releases generated 20.8 percent of all monthly transactions, with six titles finding a spot in the top 25 rentals.
Consumers' passion for the late-August release The Passion of the Christ launched Fox into second place with 19.5 percent of September rentals. Warner Home Video placed third, with 17.5 percent of September rental transactions, maintaining a solid presence on the rental front. Paramount Home Entertainment (12.8 percent) and Lions Gate Home Entertainment (10.7 percent) rounded out the top five studios in rental market share for the month.