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KN92105 KEY NOTE VIDEO RETAIL AND HIRE OCTOBER 1995

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ISBN 1-85765-484-6

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TABLE OF CONTENTS

Executive Summary
Market Definition
MARKET POSITION
MARKET TRENDS
Table 1: Consumers' Expenditure on Video Cassettes and All Recreational Entertainment (£m and percent), 1990-1994
Market Size
THE TOTAL MARKET
VIDEO HIRE
SELL-THROUGH VIDEO
BLANK VIDEOS
Table 2: Average Household Expenditure On Video Cassettes (pence and £m), 1987-1993
Table 3: The Total Market for Video Cassettes (£m at rsp), 1987-1994
Table 4: The Video Hire Market (£m and million hirings), 1990-1994
Figure 1: The Video Hire Market (£m), 1990-1994
Table 5: Themes of Hired Videos ( percent), 1994
Table 6: The Sell-Through Market (£m and million units), 1990-1994
Figure 2: The Sell-Through Market (£m), 1990-1994
Table 7: Month of Purchase of Sell-Through ( percent volume), 1994
Table 8: Themes of Sell-Through Videos ( percent volume), 1992-1994
Table 9: Distribution Structure for Sell-Through ( percent volume), 1994
Table 10: The Blank Video Cassette Market (£m and million units), 1990-1994
Figure 3: The Blank Video Cassette Market (£m), 1990-1994
Industry Background
RECENT HISTORY
VIDEO RETAIL (SELL-THROUGH)
INDUSTRY CONCENTRATION
TRADE ASSOCIATIONS
ORGANISATIONS
Competitor Analysis
THE MARKETPLACE
MARKET LEADERS
ADVERTISING AND PROMOTION
Table 11: Leading Video Distributors (£m), 1995
Table 12: Leading Video Retailers by Outlets, 1995
Table 13: Market Leaders in Video Hire ( percent volume), 1994
Table 14: Market Leaders in Sell-Through ( percent volume), 1994
Table 15: Main Media Advertising Expenditure by Retail Video and Music Specialists (£000), Year Ended June 1994-1995
Table 16: Main Media Advertising Expenditure for Pre-Recorded Video Titles (£000), 1993-1995
Table 17: Main Media Advertising Expenditure by Distributors and Exhibitors (£m), Year Ended June 1994 and 1995
Strengths, Weaknesses, Opportunities and Threats (SWOT)
VIDEO RETAIL (SELL-THROUGH)
VIDEO HIRE
Buying Behaviour
HARDWARE PENETRATION
CHANNEL PENETRATION
SOFTWARE PENETRATION
VIEWING PATTERNS
Table 18: Household Penetration of Television and Video Recorders ( percent), 1983-1994
Table 19: Video Recorder Penetration of Households by Socioeconomic Group ( percent), 1994
Table 20: Household Penetration of Cable and Satellite ( percent), 1990-1994
Table 21: Household Penetration of Selected Satellite Channels ( percent), 1992 and 1994
Table 22: Purchasing of PRCs ( percent by number), 1990-1994
Table 23: Purchasing of Blank Video Cassettes ( percent by number), 1990-1994
Table 24: Hiring of Prerecorded Cassettes ( percent by frequency), 1990-1994
Table 25: Hours Spent Watching Prerecorded Cassettes ( percent by hours weekly), 1990-1994
Table 26: Hours Spent Watching Self-Taped Programmes ( percent by hours weekly), 1990-1994
Outside Suppliers to the Industry
EARLY ATTITUDES TO VIDEO
THE 'WINDOWS' CONCEPT
SIMULTANEOUS RELEASES
ROLE OF WALT DISNEY COMPANY
Table 27: Sales of Buena Vista Home Entertainment Ltd (£m), 1992-1994
Current Issues
MULTIPLE GROCERS
BLOCKBUSTER
GLOBAL VIDEO
'WINDOWS' CHANGES
DIAL-UP VIDEOS
Forecasts
IMPACT OF DISNEY INITIATIVES
CONSUMER CHARACTERISTICS
THE MOVIE SUPPLY
NEW TECHNOLOGY
Table 28: Forecast of the Markets for Video by Volume and Value (£m and million units), 1994-2000
Company Profiles
INTRODUCTION
DEFINITIONS
FURTHER INFORMATION
Further Sources
ASSOCIATIONS
PERIODICALS
DIRECTORIES
GENERAL SOURCES
ICC INFORMATION SOURCES
GOVERNMENT PUBLICATIONS
OTHER SOURCES

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EXECUTIVE SUMMARY

The market for prerecorded video tapes was worth £1.1bn in 1994 and, as such, it represents around 2.7 percent of UK consumer expenditure on recreation and entertainment services. The total video cassette sector also takes in the smaller and fairly static market for blanks, worth £140m in 1994.

Expenditure on prerecorded products divides into hired videos and retail, or `sell-through', videos that consumers can buy to keep. Video hire is currently worth £438m (in 1994) and sell-through has overtaken it since 1993, to reach £698m, or 54.7 percent of the entire video cassette sector.

The hire (or rental) market has been declining since its late-1980s peak, due to a variety of threats:

* more recent films being shown `live' on terrestrial channels
* increasing subscriptions to satellite TV
* the recession in general
* the lack of sufficiently attractive rental outlets.

The notable exception to this rule is Blockbuster, the leading quality outfit, which dominates the multiple-outlets scene for hiring, but only accounts for 20 percent of all videos hired. Most of the remainder is still hired through local independent clubs.

Contrary to some suggestions, the sell-through option has not been greatly responsible for the decline of hiring. Instead, the market has fed off a strong latent demand for collecting good movies, old TV programmes and fitness or sport videos. Demand has also been actively stimulated by the eventual decision of the Hollywood studios, which produce the big movies, to allow them for sale earlier after cinema release. Disney products, which have dominated the best-seller lists, have also contributed to the growth pattern which has doubled the sell-though market between 1990 and 1995.

Prospects for the sell-through market are excellent, although prices may come down as supermarkets increase their penetration. Only half of video cassette recorder (VCR) owners are prerecorded cassettes (PRC) buyers, so the potential for expansion is strong. The future for hiring is much less promising, but much depends on decisions taken by the big film companies as regarding the future pattern of `windows' between cinema, rental and sell-through release.

Text © 1995 Key Note

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