Video renting sector trends

Woman holding DVD  in rental shop with woman in background looking for DVD

The video rental industry has seen some huge changes in the relatively short space of time since the days when video rental shops were a common feature on the high street. Some of the main landmarks in the evolution and then decline of the industry include:

  • the arrival in the UK of the US giant Blockbuster, which purchased the Ritz chain of video rental shops in the 1990s and set about competing very aggressively with independents
  • the introduction of the DVD - and then high-resolution DVD formats like Blu-ray - to replace the old VHS video cassette
  • a huge increase in the amount of choice available to television viewers - including dedicated movie channels
  • falling retail prices of new DVD titles and a huge increase in the range of titles available to buy outright
  • the arrival in the UK of postal-based rental specialists like LoveFilm (which became part of Amazon until it was closed down in October 2017)
  • improvements in internet technology, leading to the rapid rise of on-demand film and television streaming services
  • the rise of internet-based digital piracy
  • improvements in mobile data services, making digital streaming available to people on the move
  • the emergence of cloud-based media storage services for storing vast amounts of users' digital content

The rise of on-demand services in particular revolutionised in-home film distribution, and even the largest DVD rental specialists were hit - Blockbuster ceased trading in the UK in 2013.

Unlike the music industry, where the old vinyl format and the record shops which sell it have hung on against the odds thanks to demand from aficionados, few people seem to have much nostalgia for the DVD despite its quality advantages over streaming. And those who do want to rent and play DVDs are still very well served by the specialists who offer their services by post, while those who prefer to buy physical format DVDs to keep can do so from many different types of bricks and mortar and online retailer.

By the mid 2010s, over two thirds of the market was still buy-to-own and, although declining year on year, physical media accounted for over 60% of the market. In 2014 the number of physical music and video stores reached an all-time high, although by then a third of all physical sales were being made online for home delivery. As physical media has declined, digital media has grown each year and by the mid 2010s two thirds of all video business was made online, either by way of home delivery or streaming. By the end of the 2010s more people were subscribing to streaming video services, such as Netflix and Amazon, than pay-TV. Nevertheless, DVDs continue to be popular due to their ease of use and their popularity as gifts. As a result, according to the British Association for Screen Entertainment (BASE) in 2018 over 90% of homes had a DVD playing device, which is good news for the DVD sales and rental market.

Alongside these important developments in the film rental/streaming industry, demand for video games has soared. Consoles and the technology have got better and better, games developers have become more and more creative, and as a result gaming is now popular with people of all ages. This has created some opportunities for the rental industry, although once again anyone offering to rent games from a shop faces strong competition from online and postal-based services, which can offer a huge range of titles and the convenience of home delivery.

Keeping up to date with developments

Joining a trade association is an excellent way of keeping up with developments in your industry. The video market is represented by the British Association for Screen Entertainment which provides a great deal of useful information to members. You can find out more on their website.

The Entertainment Retailers Association (ERA) represents both the physical and digital sectors of the music, video and video games industries, at both retailer and wholesaler level.

The industry is monitored by the Video Standards Council Rating Board (VSC) which was set up to promote high standards.

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