<strong>PHYSICAL: </strong>Q3 spending rises 10% on Blu-ray, kiosk growth

Knowing of Summit Home Entertainment

Summit Home Entertainment’s Knowing was the top rental in the third quarter.

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OCT. 9 | PHYSICAL: If the lackluster economy this year has been good to one business, it’s packaged media rental.

U.S. consumer spending on rentals of DVD and Blu-ray Disc surged 9.9% in the third quarter over the same period in 2008, according to Rentrak Corp.’s Home Video Essentials, as consumers hunkered down with inexpensive entertainment. Rental spending across both formats and all retail channels hit $1.6 billion in the quarter, fueled by big gains in Blu-ray and the growing popularity of Redbox.

For the full year through September, overall rental spending is up 8.2%, to $5 billion, according to Rentrak.

“The widespread distribution of Blu-ray titles into the primary rental channel is supporting the rapid adoption of the format by consumers, greater than what we saw on DVD,” Rentrak VP Brad Hackley said.

Consumers spent more than $111 million renting Blu-ray discs through bricks-and-mortar and online outlets in the third quarter, 44.5% more than a year earlier. Year-to-date Blu-ray rentals are up 53.8% to $313 million, Rentrak reports.

DVD rentals through traditional and online retailers are off 2.8% for the year, to $4 billion.

The kiosk channel still represents just about 14% of all rentals, but is growing at a speedy clip. Kiosk rentals have grown by more than 120% this year, as Redbox has surpassed more than 17,000 kiosks in stores and Blockbuster and NCR gear up their kiosk joint venture.

Kiosks face new challenges in the fourth quarter, however, as 20th Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Home Video all impose a window of four weeks or more after their titles’ general release for the kiosk channel. The three studios combined represent about a 40% share of the rental business.

The studios are concerned that inexpensive kiosk rentals and the used DVD inventory they create cannibalize higher-margin revenue streams, particularly DVD sales.

DEG: The Digital Entertainment Group is expected to release industrywide third-quarter home entertainment results, including DVD and Blu-ray sales, shortly.

Q3 TOP RENTALS 

Rank

Title

Release Date

Studio

1

Knowing

7/7/2009

Summit

2

I Love You, Man

8/11/2009

Par

3

Push

7/7/2009

Summit

4

Watchmen

7/21/2009

WB

5

Gran Torino

6/9/2009

WB

6

Obsessed

8/4/2009

Sony

7

The Haunting In Connecticut

7/14/2009

LG

8

The Soloist

8/4/2009

Par

9

Fast & Furious

7/28/2009

Uni

10

The Unborn

7/7/2009

Uni

11

Confessions of a Shopaholic

6/23/2009

Disney

12

Race to Witch Mountain

8/4/2009

Disney

13

True Blood: The Complete First Season

5/19/2009

HBO/WB

14

The Last House on the Left

8/18/2009

Uni

15

The Curious Case of Benjamin Button

5/5/2009

Par

16

17 Again

8/11/2009

WB

17

State of Play

9/1/2009

Uni

18

Taken

5/12/2009

Fox

19

Duplicity

8/25/2009

Uni

20

Coraline

7/21/2009

Uni

Source: Rentrak Home Video Essentials; Year-to-date through Sept. 27.

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