The home video divisions of the big movie studios continue to see rental as an integral component of the market -- and an opportunity for supermarkets.
how. "We think it will be an important, significant piece of our business for many years to come."
About 45 to 50 million households now have DVD players, and they have been heavy purchasers of DVDs, said Mike Dunn, president, Twentieth Century Fox Home Entertainment, Beverly Hills, Calif. "The next 20 million households will primarily be renters, and a lot of them are lapsed renters," he said.
"What you're going to find is people re-energized in the category, and they'll also be re-energized in rental. As a result, transactions will increase for the next couple of years," Dunn said.
The lower price points on DVD are attracting some supermarkets back to the rental business, said Kelley Avery, worldwide head of DreamWorks Home Entertainment, Glendale, Calif. "They have that customer who comes in a couple of times a week, and no other retailer has that kind of traffic. That's the case for selling DVDs as well as renting DVDs," she said.
The rental business is still an opportunity for supermarkets, but the infrastructure needed to enter it is a barrier to some retailers, noted Bob Chapek, president, Buena Vista Home Entertainment, Burbank, Calif. "Rental is still a growing business. It's growing a few percent a year, not as fast as sell-through, and a lot of people who used to rent are buying now instead," he said.
"The reality is the rental market is not going anywhere," said Steve Feldstein, senior vice president, corporate and marketing communications, Twentieth Century Fox Home Entertainment. "It's robust. DVD rentals recently surpassed VHS rentals. Supermarkets are more in the game," he said.
Some supermarkets have stayed with video rental through the years, and are still in it successfully today. However, others got out when video rentals became problematic and less profitable, he said.
"The most important thing for supermarket retailers is, if you think you got burned once, don't stay away. This is a huge dynamic business. There's every opportunity for you to be successful. If you're reticent, give it a try. If you're in it and you're successful, you know what I'm talking about," Feldstein said.
