Hello, elizabeth123-ga!
Thank you for your patience while I researched the different aspects
of your question. I wanted to be as thorough as possible in compiling
an answer.
The Australian Film Commission is a good source for facts concerning
the Video Rental Industry. I have highlighed several statistics below
and provided links to other charts that may be of interest.
"Sources of income for businesses in the video hire industry,
1999/2000
=======================================================================
"Of the video hire industry’s $595 million total income, 83 per cent
($493 million) came from rental of videos and video-related goods such
as DVDs and video games. Most (90 per cent) of this rental income came
from videos ($444 million) and almost 70 per cent of the video rental
income was from new releases. Overall, just over half of the total
income of these businesses came from rental of new release videos."
http://www.afc.gov.au/gtp/wvincome.html
==
Some excerpts from the "Fast Facts" page follow:
http://www.afc.gov.au/gtp/wvfast.html
VIDEO HIRE OUTLETS 1999/2000
=============================
No. businesses
1,166
Total employment
(75% part-time; 61% women)
11,615
Income
$595.2m (75% from tape rentals)
Expenses
$558.7m
Operating profit margin
7.2%
RENTAL TRANSACTIONS
===================
No. transactions (1999/2000):
Video hire
151.9m
DVD hire
1.3m
Games hire
7.6m
No. active store memberships (1999/2000)
5.5m
Average price for overnight rental of new-release video (2001)
$6.62
WHOLESALE SALES 2001/2002
===========================
No. units sold
27.4m - 2001
40.4m - 2002
VHS tapes
16.7m - 2001
17.6m - 2002
DVDs
10.7m - 2001
22.8m - 2002
Revenue to distributors
$590.0m - 2001
$826.0m - 2002
from VHS tapes
$346.9m - 2001
$323.3m - 2002
from DVDs
$243.1m - 2001
$502.7m - 202
RETAIL SALES 2001/2002
======================
Total units sold
13.4m - 2001
21.8m - 2002
No. tapes
9.1m - 2001
8.5m - 2002
No. DVDs
4.3m - 2001
13.3m - 2002
Total value of sales
$315m - 2001
$554m - 2002
Tape sales
$174m - 2001
$155m - 2002
DVD sales
$141m - 2001
$398m - 2002
Video product 2001
====================
Top movie genre (% of sales value):
Video tapes
Action (19%)
DVDs
Action (32%)
No. tapes/DVDs classified
2,852
Proportion local product
(16 year av.)
9%
Proportion from USA
(16 year av.)
63%
Video equipment 2001/2002
=========================
Proportion of homes with a VCR
88% - 2001
89% - 2002
One only
64% - 2001
62% - 2002
Two or more
25% - 2001
27% - 2002
Proportion of homes with a DVD player
n.a. - 2001
24% - 2002
Retail sales of DVD players:
No. sold
451,186 - 2001
903,284 - 2002
Average price
$470 - 2001
$343 - 2002
(Read more if you are interested in the Top Five Rental and Retail
Movie Titles)
Also see similar statistics from the Australian Bureau of Statistics
"Video Hire Industry, Australia":
http://www.abs.gov.au/ausstats/abs@.nsf/lookupMF/93131C51B4F3B876CA256A5B0005E513
ADDITIONAL STATISTICAL CHARTS:
=============================
"Key statistics on businesses in the video hire industry, 1999/2000,"
http://www.afc.gov.au/gtp/wvkeystats.html
"Sources of income for businesses in the video hire industry,
1999/2000"
http://www.afc.gov.au/gtp/wvincome.html
"Items of expenditure for businesses in the video hire industry,
1999/2000"
http://www.afc.gov.au/gtp/wvexpenditure.html
"Number of businesses in the video hire industry, income and
employment by state, 1999/2000"
http://www.afc.gov.au/gtp/wvhirexstate.html
"Number and characteristics of video hire businesses of various sizes,
1999/2000'
http://www.afc.gov.au/gtp/wvhirexbussize.html
"Proportion of video stores involved in various retail activities,
1992-2001"
http://www.afc.gov.au/gtp/wvhireactivity.html
"Proportion of video stores stocking various numbers of tapes or DVDs,
1992-2001"
http://www.afc.gov.au/gtp/wvhirexstock.html
"Overnight rental rates for new release videos, 1989-2001"
http://www.afc.gov.au/gtp/wvhirexrates.html
GROWTH TRENDS AND PROJECTIONS
=============================
"The video industry in Australia: Trends and issues" provides a more
in-depth discussion of the current state of the industry:
http://www.afc.gov.au/gtp/wvanalysis.html
Some excerpts:
"Although rentals have traditionally been difficult to calculate, the
ABS reports that the total income of businesses in the video hire
industry was $595 million in 1999/2000.
"Some see the rental industry as being in a healthy but mature phase;
others regard the threats from competing entertainment forms,
especially video-on-demand and digital television, leading to an
inevitable shake-out for stores."
"As ever, rental store profitability largely depends on new releases
that have succeeded in cinemas, with the peak rental period for a
major release now as short as two weeks according to some reports and
most of the rental income earned in the first eight weeks. Thus the
issue of ‘copy depth’ - rental stores having enough copies to meet
demand - is as relevant as ever."
"While one leading retailer says the number of rentals is heading
down, distributors are shipping videos and DVDs at record levels. A
decade ago, there were 6.48 million units reaching stores. Last year
there were 17.2 million, including a massive 11 million videos for the
‘sell-through’ market (sales to the public), 3.5 million videos to
rental stores and 2.7 million DVDs, which are released as sell-through
titles but often go to the rental market."
"For distributors, rental revenue has now been overtaken by
sell-through. Revenue from the sale of tapes for rental was down nine
per cent in 2000 to $175.5 million, while sell-through tapes and DVDs
combined to earn $227.7 million. But as suggested above, DVD sales
also include titles that end up as rental stock: one distributor says
the country’s 2,000-odd video stores are starting to put 15 to 20 per
cent of their purchasing budget into this format."
"Sell-through tapes (worth $163.6 million to distributors in 2000)
still dominate over DVDs (worth $64.2 million), but DVD sales are
growing rapidly, with revenue from this source rising 248 per cent
between 1999 and 2000."
==
"What’s really changed is the way the business has become more complex
from a marketing point of view. In 1990, the sale of videos for rental
accounted for three-quarters of distributor revenue; a decade later it
was less than half. Instead of just releasing a new title for rental
at, say, $90, distributors are now juggling simultaneous releases on
both VHS and DVD at various lower prices."
"For distributors, this increases the risk. They once shipped 60,000
copies of a top rental title. Now they talk about 50,000 to 55,000
being the maximum for a blockbuster on VHS. But that’s without
factoring in potentially huge DVD sales: Gladiator sold more than
150,000 copies on DVD and The Matrix sold more than 110,000 copies."
"To maximise rental sales, some distributors have launched
revenue-sharing arrangements with stores: selling titles more cheaply
but also taking a slice of rental revenue. Retailers have to decide
whether to buy, say, 50 copies at $50, or 70-80 copies at $35-$40 and
then share the increased rental income."
"Work pressures have contributed to rentals being primarily a
Friday-to-Sunday business, with 65 per cent of retailer income in
these three days. There’s also a heavy emphasis on major releases in
this period: ‘Realistically 90 per cent of the population want to see
10 per cent of the films,’ says a retailer."
"The copy depth issue means a medium-sized store might buy 50 to 60
copies of a big title. ‘The peak demand is less than two weeks unless
you get consecutive wet weekends,’ says the same retailer. Stores need
to maximise rentals before demand slows. One distributor claims that
80 per cent of rental revenue is earned in the first eight weeks of a
title hitting the shelves. The ability to buy enough copies of a
blockbuster title to overcome the copy depth problem is what allows
the country’s largest chain - Video Ezy - to promise customers they’ll
get it first time or they’ll get it free."
"In recent years, the major rental chains have extended their
influence. Many independently owned stores have become franchise
outlets for Video Ezy or Blockbuster, the attraction being the greater
buying power of the chains. As of early 2001, Video Ezy remains the
country’s biggest chain with 450 stores, 28 company-owned and the rest
franchisees."
(Read more for information about DVD sales)
===
From "THE BIG ISSUE: THE SCREEN INDUSTRIES IN THE INFORMATION AGE," By
MALCOLM LONG. SPAA Conference 2001.
http://www.aba.gov.au/abanews/speeches/bcasting_info/pdfrtf/spaa_conf2001.pdf
"AVSDA, the Australian Visual Software Distributors’ Association,
reports that overall wholesale video rental and sell-through revenues
for the year 2000 totalled $467 million, up from $386 million in
1999."
* "Revenues for video and DVD rental have been decreasing over the
past 5 years. However, there has been a steady increase in video and
DVD sell-through over the same period. In 2000, DVD wholesale revenues
comprised one quarter of the total video/DVD wholesale market, a
considerable increase on the ten per cent of the year before.
Australian productions have shared in the benefits from these trends."
===
The following statistics from the 1990's were compiled in a report by
the Motion Picture Association:
"SUPPLEMENTAL SUBMISSION TO THE INTELLECTUAL PROPERTY & COMPETITION
REVIEW COMMITTEE," by the MOTION PICTURE ASSOCIATION. May 31, 2000
http://www.ipcr.gov.au/SUBMIS/docs2/Sub46.pdf
Video Use in Australian Households
==================================
1994 4.3 million
1996 4.3 million
1998 5.5 million
1999 6.8 million
Comparative Video Retail Prices:
Average Sell Through Prices in $US During April 1999
====================================================
Country VHS DL DVD
Australia 13.53 22.30 20.00
Hong Kong 16.50 N/A 30.00
Singapore 11.00-17.00 28.50 23.00-29.00
Japan 25.00 38.00 28.50-39.50
Thailand 9.10 60.00 32.00-36.00
United States 12.85 40.00 24.95
United Kingdom 15.50 N/A 28.87
New Zealand 13.35 N/A 21.35
=====
DVD'S ARE MOVING IN ON THE VIDEO MARKET
======================================
In 2002, approximately 90% of Australian household had Video Casette
Recorders. However, DVD players are rapidly taking over
"Despite video cassette recorders being in about 95 per cent of homes,
DVD players have quickly reached about 25 per cent penetration after
coming on the market in 1997 - and sales are increasing by 80 per cent
a year. Last December, in the lead-up to Christmas, DVD-player sales
for the first time outstripped VCRs."
"According to industry analysts, VCR sales dropped 14 per cent last
year but 850,000 units are still expected to sell this year. About
800,000 DVD players are expected to be sold this year. Within four
years, VCR sales are expected to dry up."
Blockbuster Video's director of marketing, David Woodward, described
the transition to DVDs as "great for our industry" and said the chain
was renting new-release movies 50-50 between video and DVD formats.
And while video movie cassette sales are still reasonably strong,
music shops and online suppliers such as Planet DVD are selling
thousands of DVD titles each month.
From "The DVD takes off in record time," by Lyall Johnson. The Age
(October 13 2002) http://www.theage.com.au/articles/2002/10/12/1034222635642.html
==
"VHS could soon go the way of Beta as more and more people snap up
movies on DVD. The value of DVD sales is now almost double that of VHS
sales, and retail and rental stores are being forced to adapt."
"Simon Smith, of HMV's Pitt Street store, said: "DVD sales are
doubling in size. We stock more DVDs than video now. Customers like
the extras you get on the discs - features like trailers, deleted
scenes, games and director and actor commentaries."
"In May retailers sold 1.1 million DVD movies for $32 million,
compared with a million on VHS for $16.3 million, according to figures
by the video distributor Buena Vista Home Entertainment."
"Video rental shops say the shift from VHS rentals to DVD sales is
acting favourably on store revenues. The general manager of Video Ezy,
Peter Scicluna, said: "They [customers with DVD players] buy or rent
new releases as well as back-catalogue releases such as Lawrence of
Arabia or The Terminator. We wouldn't be able to rent out the
equivalent on VHS."
"Another worrying development for movie retailers is that many new
films are being stocked by supermarkets. The executive director of the
Australian Video Retailers Associations, Ross Walden, said he believed
video shops would survive but that they would need to offer what mass
merchants did not, an extensive back catalogue, repair services and
sound customer advice."
From "Movie fans pass over tapes for the little extras in life," by
Jonathan Pearlman. Sydney Morning Herald (July 22 2002)
http://www.smh.com.au/articles/2002/07/21/1026898946550.html
MAJOR PLAYERS
=============
Video Ezy
=========
"Video Ezy was founded in Australia in 1983 and quickly established
itself as the most innovative of the video retail outlets.....As of
mid-2002, Video Ezy has over 450 outlets throughout Australia and over
136 outlets in New Zealand. Video Ezy is the largest most successful
of the Home Entertainment retail Organistions in these regions, a
proficient accomplishment given the Australian region has the largest
per capita video rental turnover in the world."
"In May 2002, 60% of the Franchisor's interest was sold to a
consortium comprising of the CHAMP Ventures company, Video Ezy
management and The Ivany Investment Group, the investment arm of the
former Hoyts Theatres CEO Mr Peter Ivany."
http://www.videoezy.com.au/videoezy/About%20Us.asp
"Video Ezy is Australasia's largest video rental organisation, with
430 franchise stores and 30 corporate stores in Australia and a
further 254 stores in Thailand, New Zealand, Malaysia, Indonesia and
Singapore. Established in 1990, Video Ezy has market leadership
positions in VHS, DVD and video game rental and retail markets, with
40% of Australian households as members."
(From the Champ Ventures Portfolio at
http://www.champventures.com/portfolio.html )
In 2000, the Australian Competition and Consumer Commission counted
Video Ezy as a price leaders:
"The ACCC believes Video Ezy is a large player in the video rental
market and is one of the price leaders."
http://www.accc.gov.au/media/mr2000/mr-76-00.htm
Civic Video (Australian-owned franchise)
=========================================
"At present Civic Video is over 300 stores strong...Civic Video now
has stores in all mainland states and territories with a concentration
of stores along the eastern seaboard."
http://www.civicvideo.com.au/About.php?dept=story
"Civic Video is the largest wholly Australian-owned video hire chain."
From The Australian Franchise Opportunities Exchange:
http://www.halledit.com.au/bizops/fran/civic.html
Network Video
=============
"Network Video is the largest, most successful marketing and buying
group in the Australian video industry with over 400 stores......Today
there are over 400 Network retail stores and you will find Network
Video outlets in every state and territory of Australia. Network Video
shopfronts continue to increase as more rentailers become Network
retailers and, in turn, 'Videologists'."
http://www.networkvideo.com.au/info/?page=aboutus
Blockbuster Australia:
======================
As of 2002, Blockbuster had 223 franchise stores in Australia.
http://www.blockbuster.com.au/info/?page=franchise
=======================
I hope this information proves useful to you. Short of buying an
expensive market research report, I believe I have found as much
information as is publicly available without a fee. If I can provide
any further clarification, please let me know and I will be happy to
help if I can.
Sincerely,
umiat
Search Strategy
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