Online DVD rental market, one of the fastest growing e-commerce sectors ever 64% of subscribers no longer rent from the high street
LONDON, 9 February 2005: Video Island, the UK’s largest independent online DVD rental company, today announced figures, which underline the already massive impact online DVD rental has had on the overall DVD rental market. According to MRIB figures for 2004, Video Island, together with its consumer brand ScreenSelect.co.uk and partners (Tesco, MSN, ITV) already account for a significant 3% of the total DVD rental market in the UK. This is the one of the fastest growth rates of any e-commerce sector.
This growth is substantiated by numerous factors. A recent national omnibus survey conducted for Video Island by Taylor Nelson Sofres, revealed that nearly 10m UK adults rent DVDs monthly, 24% rent 4 or more times a month, 36% two to three times and 39% once a month, showing the considerable opportunity available within the market. The TNS study also highlighted the fact that already 89% of online homes have DVD players. Furthermore, research carried out by ScreenSelect.co.uk amongst its users also discovered that 64% of subscribers no longer rent from the UK high street, traditionally dominated by Blockbuster.
While Netflix has been highly successful with subscription-based DVD rental in the US, the European market remains largely untapped, despite the increasing level of DVD player penetration. Research by Screen Digest estimates the DVD rental market is expected to be worth £388m by 2006, already 15.7m households own a DVD player and over 1 million of these households rent a DVD every week. In the broader marketplace, recent PWC research underlines the growing importance of DVD as an entertainment format, with DVD representing an average 86% of all filmed entertainment spend compared to flat box office takings.
The figures speak for themselves. With the largest library in Europe, of 29,000 titles, Video Island rented nearly 3.5 million DVDs in 2004 alone, with well over one million rentals coming in the fourth quarter alone. Video Island is now renting almost 450,000 DVDs per month, which is the equivalent of 80 high street stores. Video Island expects these volumes to treble over the next year. In January 2005, Hitwise gave Video Island and its partner sites 31% market share of all visits in online DVD rental, making Video Island the largest independent business in the sector.
Saul Klein, Video Island’s CEO, commented, “We have always believed that the selection, convenience and value-for-money of online DVD subscriptions will eclipse the traditional high street model and these figures clearly indicate we are well on the way. We are delighted that through our ScreenSelect.co.uk brand as well as with our partners, including some of the largest UK brands such as Tesco, Boots, Comet, ITV and MSN, we are rapidly transforming the UK’s DVD rental market.”
Helen Davis Jayalath, senior analyst at Screen Digest commented, “According to Screen Digest research, the number of DVD rentals made by British consumers rose by 35% last year to almost 120m, valuing the market at £363m. It’s clear that the online sector represents an increasingly important share of the rental business and that many consumers welcome the convenience of renting a wide range of titles from the comfort of their own homes.”
Source: http://www.lovefilm.com/corporate/news.html
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