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THE TOP 100: Canadian Video Chains “Bullish” on Home Video

3 May, 2002 By: Stephanie Prange

This week, Hive4Media will bring you Video Store Magazine's Exclusive Annual Research bonanza, the Top 100. Two parts of this unique research series will appear every day this week in this space. Today we continue the series with a look at the Top 10 Canadian chains and the Top 10 video streamers to watch. To view supporting charts and tables, see your copy of Video Store Magazine.

The Canadian video market continued its upward swing in 2001 -- at least for those at the top.

“We remain very bullish on the industry,” Rogers Video president Chuck van der Lee told Video Store Magazine. “DVD has helped to enhance what was really a very healthy industry.” Rogers ended 2001 with 260 stores and plans to grow to about 280 in 2002. DVD is about 35 percent of new-release rental revenue, headed for about 50 percent by the end of 2002. The No. 1 Canada-based Canadian chain isn't bothered by a little friendly competition from south of the border. “I would agree with much of what [Blockbuster Inc. CEO] John Antioco says [about industry trends],” van der Lee said. Blockbuster is the top chain in Canada.

Last year, U.S. chains Movie Gallery and Best Buy also made moves in the territory. Movie Gallery acquired Video Update's Canadian operation, and Best Buy snapped up Future Shop.

“The upshot of it is they're going to continue with what was a very healthy chain,” van der Lee said of the Best Buy deal. “It's not as if there's a new player, just a new owner.”

Quebec-based Le Superclub Videotron (No. 3) is equally as placid about competition. The chain's clientele is primarily French-speaking, said purchasing director Nancy Roi. The chain does not compete with Rogers and pairs up with the chain for promotions, she said. Blockbuster competes with only about 35 of Le Superclub's 170 locations, Roi said. Le Superclub had a strong year in 2001 in part because studios resumed releasing French-dubbed DVDs, which her customers prefer. As a result, the chain began to catch up on DVD, nearing 25 percent of rental revenue by year-end.

Canada's 58-store Jumbo Video marked a “strong” year in 2001 as well, said director of operations Mark Graham, although he added the year “had its ups and downs.” Jumbo competes with Rogers and Blockbuster through what Graham calls “true guaranteed rentals” on DVD and VHS. That means customers who can't find selected titles on DVD and VHS walk out with a free rental of any other title on the format that day rather than a coupon for a free rental. The chain also honors competitors' coupons and gives away free popcorn while customers browse.

“Everybody has the same product,” he said. “We have to deliver it differently.”

Jumbo recently acquired the Microplay game chain to prepare for the coming growth in that sector and a three-store, mall-based sellthrough video chain called Starstruck. The acquisitions should bring Jumbo to about 128 outlets, Graham said.

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