Australia has historically lagged the US in the penetration of new
media channels (TV, PayTV) due in part to government regulation.

Pay TV penetration is currently only 22%, but Foxtel (a Joint venture
between NewsCorp, PBL and dominant telco 'Telstra') has emerged as the
clear PayTV market winner and can now concentrate on category building
rather than competing with other PayTV operators.

Also on the horizon is digitisation of PayTV (next year) and near
video on demand, plus streaming media.

On the plus side, DVD has fuelled demand for movies.

What is the outlook for the number and profitability of video rental
stores in Australia? Are there any regional considerations?  What is
the time horizon?  What strategies have been employed in other markets
to position video stores for the future?

Also

<Analysts currently see the video rental industry as having reached a
mature phase. The head of one rental chain is quoted as saying
‘There’s less video being watched without question,’  ‘There’s
definitely a plateauing if not a decline.’

The entertainment market is changing in a number of ways. The revenue
from the sale of videos now exceeds that from rental. The sale of
DVD’s is rapidly increasing. Video-on-demand and digital television
are likely to have an within two to four years. This is expected to
result in the closure of stores.

In order to survive, a number of analysts predict that video rental
businesses need to diversify into selling videos and DVD’s. It is
predicted that Video on Demand will not greatly affect the sale of
DVD’s which appeal to collectors. The release of different versions of
the same film has proved popular with collectors. Titanic for example
has been released in three different versions on DVD. There has also
been demand for old movies on DVD. Over 20 percent of DVD sales are of
movies over five years old. DVD is expected to overtake VHS within
five to seven years. In March 2001 over 400,000 Australian homes had
DVD players. Many more have the capability to play DVD’s on computers,
playstations and hi-fi’s. For more information see
http://www.afc.gov.au/GTP/wvanalysis.html

A report called Movies to the Home: Packaged versus Networks predicts
that video sales will continue to grow and that renting will decline.
This will be the result of a shift towards collecting and the
upgrading from VHS to DVD.
http://www.sric-bi.com/DF/oldMFsummaries/HomeMoviesToC.shtml

Tony Adams, president of AMR, claims that the predicted decline of the
packaged movie market has been exaggerated. The innovation of DVD has
helped to boost both sales and rentals. In 1999, 57 percent of DVD
player owners bought 5 discs per month and 50 percent rented five
discs per month. See
http://www.filmandvideomagazine.com/Htm/2000/10_00/News/AdamsMedia%20DVD.htm

The Italian and European markets are analysed at 
http://www.univideo.org/files/2001eing.doc It is predicted that the
video cassette will remain a consumer item even after the purchase of
a DVD player. Low priced video cassettes will impact on the rental
market. The challenges for the Video on Demand market are also
discussed.

Adams Media Research predict that video rentals will grow one percent
in both 2003 and 2004 and then decline.
http://www.hive4media.com/news/html/buzz_article.cfm?article_id=4351 

A case study that suggest diversification is necessary for small video
stores to survive.
http://www.cbiz-onesource.com/valuationgroup/page.asp?pid=1578

How Blockbuster Video increased revenue.
http://www.boxenbaumgrates.com/GT/GTBlockBstrrCell.htm

Small video retailers lose ground to chains
http://www.s-t.com/daily/08-99/08-01-99/b08bu085.htm

There a number of statistics that show the current state of the video
rental industry in Australia:
Statistics on businesses in the video hire industry.
http://www.afc.gov.au/GTP/wvkeystats.html


Proportion of video stores involved in various retail activities
http://www.afc.gov.au/GTP/wvhireactivity.html

Analysis
http://www.afc.gov.au/GTP/video.html

Pay tv analysis
http://www.afc.gov.au/GTP/paytv.html

Number of businesses by state.
http://www.afc.gov.au/GTP/wvhirexstate.html>


<Additional links:>

<The US market>
<http://www.screendigest.com/yp_98-11.htm>

<Video rentals slow>
<http://www.usatoday.com/money/industries/retail/2002-12-18-blockbuster-outlook_x.htm>

<Competing against the major chains>
<http://www.networkvideo.com.au/info/?page=aboutus>

<Strategies for future survival>
<http://www.pwcglobal.com/Extweb/indissue.nsf/docid/8CB65D3A746FDCB5CA256B450017D9A8>


<Pay TV in Australia>
<http://216.239.51.100/search?q=cache:5GS-z_I16JEC:www.ipa.org.au/pubs/Currentissdocs/PayTV.pdf+%22impact+of+pay+tv+%22++video+rentals%22+&hl=en&ie=UTF-8#55>


<Search strategy>
<"video rentals" competition>
://www.google.com/search?q=%22video+rentals%22+competition&hl=en&lr=&ie=UTF-8&start=0&sa=N

"video rentals" predict
://www.google.com/search?q=%22video+rentals%22+predict&hl=en&lr=&ie=UTF-8&start=10&sa=N


<Hope this helps.>