DESPITE the challenges presented by online entertainment options and a range of new technologies, it seems the video/DVD rental store is here to stay.
DESPITE the challenges presented by online entertainment options and a range of new technologies, it seems the video/DVD rental store is here to stay.
A Video Stores in Australia Industry Paper, commissioned by the Australian Video Rental Retailers Association, has revealed that video and DVD rental retailers’ incomes are expected to increase by more than 9 per cent this year.
Said to be the most comprehensive analysis of the Australian video (DVD) rental industry undertaken, the snapshot shows that each video library surveyed recorded on average $644,000 in total income in 2008.
About two-thirds of that income is derived from rentals, while other aspects of the business such as snacks and film paraphernalia accounts for the rest.
The 56,500 transactions by each store in 2008 is projected to increase by 3.7 per cent this year, with stores’ other income streams expected to increase more than 5.5 per cent.
But with the likes of Perth-based online DVD rental service Quickflix growing its membership base by 40 per cent in the past year, the home entertainment industry is becoming more competitive.
ASX-listed Quickflix is now generating 1.8 million transactions a year, offering 38,000 titles to 33,000 paying subscribers.
The company’s total income for last year was $5.7 million.
Telstra’s BigPond Movies is another major online player offering the largest DVD library, with seven participating studios providing more than 40,000 titles for rent to 30,000 users.
AVRRA executive director Ross Walden said despite the emergence of online rental providers and other viewing platforms such as Foxtel and V2 Direct, the industry paper dispelled misconceptions that video stores were becoming obsolete, citing 3.5 million active members Australia-wide who rent from video stores.
“People still want personal service and maximum choice,” Mr Walden told WA Business News.
“Value for money is also critical. As in the past, people have turned to video stores in financially tough times to get the most bang for their buck.
“We don’t think that’s changing any time soon – the future looks bright.”
Network Video owners Scott and Pat Bylsma said their Mount Hawthorn store, which they have owned for 18 years, was now “booming”.
Mrs Bylsma said by offering a wide variety of stock from different genres, employing educated staff passionate about movies and personalising customer service, the store had enjoyed a steady increase in membership and transactions in recent years.
“We attribute our success to being in touch with trends and understanding our customers’ needs,” Mrs Bylsma said.
Quickflix founder Stephen Langsford said as a leading player in the Australian marketplace, with only Telstra as a major competitor, he believed online rental would be the dominant form of transacting in Australia within five years.
Mr Langsford said with 3,000 customers added every quarter, if Quickflix could achieve 10 per cent household penetration the company could reach a million subscribers.
