Survey: 45% Renting Fewer Movies18 Aug, 2006 By: Erik Gruenwedel
The shrinking landscape for video rental stores is affecting consumer attitudes and home entertainment choices, according to a recent survey.
A nationwide survey of 904 adults commissioned for, and reported in, Investor's Business Daily found that 18% of respondents said a video store had closed within their neighborhood in the last two years. Of those respondents, 46% had rented a movie in the past month (58% in the past two years) compared to 53% in neighborhoods without a video store closure.
Of respondents whose neighborhood had a video store closure, 28% switched to per-per-view movies compared to 23% in neighborhoods with no video store closures.
Just 40% of respondents said they had rented the same number of movies as two years ago, and 14% said they had rented more titles than before.
Analyst Michael Greeson told IBD the traditional video store continued to lose ground to sellthrough at Wal-Mart and Target in addition to online rental pioneer Netflix.
“The video rental store business model is fast becoming archaic,” said Greeson. “The fewer of these stores that exist, the less convenient it becomes and the more appealing something like on-demand video service or even a mail-order DVD service becomes.”
The survey was conducted due to more than 330 store closures reported by Blockbuster Inc. and Movie Gallery in recent quarterly results.