Studio perched atop shrinking rental biz

Despite having only “Miss Congeniality” among the top 20 rental titles of the year, Warner Home Video has jumped to first place from third in video rental market share for the first half of the year.

Spot isn’t an unfamilar place for the studio. After trailing Buena Vista and Columbia TriStar in first-half video rental revenue marketshare in 1997 and 1998, Warner rode a truck full of strong titles to the top of the video pile in the first half of 1999 before relinquishing the crown to Buena Vista again last year for both the first half of the year and the full 2000.

Universal maintained second-place market share with the top two rental titles so far, “Meet the Parents” ($84..4 million) and DreamWorks’ “What Lies Beneath” ($66.6 million), in a VHS rental market that is down a record 13%.

DVDs, on the other hand, saw a 174% gain over last year.

The net effect is a nearly 3% decline in overall spending on homevideo rentals from January through June, down to $4.1 billion from $4.22 billion during the same period last year, according to VSDA Vidtrac research provided by Daily Variety‘s sister publication Video Business.

The slight drop in video rental revenue masks a much larger problem overall: nearly 7% fewer videos, or about 98 million fewer copies, went out the door. The 1.35 billion rentals, however, are still more than double the number of movie theater tickets purchased.

More buying, less renting

Much of the decline in video rentals is attributed to the increasing number of videos being purchased, particularly DVDs. Although first-half sales figures are not available yet, Tom Adams of Adams Media Research estimates that while about the same number of videocassettes are being sold to consumers, 40 million-50 million more DVDs have been purchased this year as compared to this point last year.

“It’s a general shift in viewers’ consumption pattern,” Adams said. “A significant number of trips to the videostore (to rent a movie) have been prevented by DVD sales.”

Despite having the exact same $615 million in VHS rental revenue this year, Warner’s market share increased from 15.4% of the $3.99 billion market in the first half of 2000 to 17.7% of the $3.47 billion market this year. With an extra $80 million from DVD rentals, Warner’s market share of the overall $4.1 billion rental market jumped to 18% from 15.6%, with 17 of the top 100 rental titles.

Universal increased its market share to 17.2% from 15.7%, despite a $36 million decline in VHS rental revenue, thanks to a $77 million increase in DVD rentals.

Buena Vista hit

Buena Vista took the biggest hit, dropping two spots to third place as it was bumped down a spot in both VHS and DVD. Studio saw its titles generate $24 million less rental revenue so far this year, while fourth-place Columbia TriStar enjoyed a slight overall increase in revenue of $16 million.

The only other supplier to enjoy increased rental revenue was sixth-place Fox, which overcame modest VHS revenue declines with a 392% gain in DVD rental revenue to $57.6 million from $14.7 million.

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