DVD takeover bid

A first for disc biz as rentals surpass VHS

For the first time, consumers in a given week have rented more DVDs than VHS cassettes, according to VSDA VidTrac.

A total of 28.2 million DVDs were rented the week ending June 15, compared with 27.3 million VHS units.

“This is a milestone in the history of homevideo,” VSDA president Bo Andersen said. “Since the advent of video rental 25 years ago, videocassettes have been the dominant format for video rental. Now, just over six years since its launch, DVD has supplanted that pioneering technology in the rental market, as it did in the sales market.”

In March, weekly DVD rental revenue surpassed VHS rental revenue for the first time. During the week ended May 11, year-to-date DVD rental revenue overtook that of VHS. Through June 15, DVD has raked in $2.1 billion in rental revenue (up 72.2 from this point in 2002) while VHS has brought in $1.9 billion (down 26%).

In 2002, VidTrac reported that VHS had 2.02 billion rental turns (for $5.3 billion in rental revenue) compared with 915 million DVD turns (for $2.9 billion).

Still, VSDA director of research Brad Hackley said the VHS market remains strong, noting that 50 million U.S. homes have a VCR but no DVD player, according to the Consumer Electronics Assn. “That’s a very large market, and the homevideo industry will continue to serve those consumers,” Hackley said.

(Jennifer Netherby is a reporter for Daily Variety sister publication Video Business.)