The Future Of Video Rental Report Details

CONTENTS Executive Summary I. History II. The Subscription Revolution III. The Rental Store Of The Future IV. The Changing Retail Marketplace V. New Technology: Threats & Opportunities For Retailers VI. Video Rental's Impact On Studio Economics VII. Findings From The AMR Video Model Appendix A. Traditional And Subscription Rentals Appendix B. The Video Store Of The Future FIGURES Total U.S. Rental Transactions Box Office Annual Admissions v. Admissions per Household 2004 Total Movie Transactions Comparison of Consumer Propositions Studio Rental Revenue v. Video Households Consumer Rental Spending v. Retailer Gross Profit Studio Participation Percentage of Consumer Spending Studio Revenue Comparison Consumer Spending Rental v. Supplier Revenue 1995-2004 Points of Diminishing Returns Year-Over-Change: Spending v. Supplier Revenue Pay TV Subscription v. ALC Revenue Scenarios from ALC and Subscription Subscription Video Rental Consumer Propositions Availability Comparison by Company Payback on Cost of Acquiring One Subscriber ALC v. Subscription Spending Video Rental Subscriptions A Future Revenue Scenario Big Three Game Rentals as a % of Total Rental Video Store Game Revenues Video Store Sell-Through Revenue Potential Music Retail Market Share Book Retailer Market Share Video Game Sales Retail Market Share Sell-Through Video Share Packaged Video Spending 2004 Rental Outlets By Store Type 2003 2003 Video Rental Marketshare 2003 Rental Market Share by Store Type Super-Store Gains in Market Share The Shift Toward Super-Stores: Store Counts Top Video Rental Outlet Comparison The Rise of Sell-Through Consumer Propositions VOD v. DVD Households "Virtual VOD" v. Cable VOD Studio ALC Revenue Studio Revenue From Competing Windows The Future of Supplier Revenue Home Video Spending And Supplier Revenue Total Video Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - First Quarter 2002 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Second Quarter 2002 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Third Quarter 2002 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Fourth Quarter 2002 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range DVD % of Total Rental Revenue Average Rental Performance by Box Office Range - First Quarter 2003 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Second Quarter 2003 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Third Quarter 2003 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Fourth Quarter 2003 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range DVD % of Total Rental Revenue Average Rental Performance by Box Office Range - First Quarter 2004 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Average Rental Performance by Box Office Range - Second Quarter 2004 Average Rental Units by Box Office Range Average Rental Revenue by Box Office Range Media Consumption Over Time VHS v. DVD: Annual Per-HH Rentals In Comparable Years VHS Rental History 1981-1994 VHS Rental History & Projections 1995-2008 DVD Rental History 1997-2003 with Estimated 2004 DVD Rental Projections 2005-2013 Total DVD Rental & Total Video History 1997-2003 with Estimated 2004 Total DVD Rental & Total Video Projections 2005-2013 Video Store Movie Revenue Components: History & Projections 1997-2005 Video Store Movie Revenue Components: Projections 2006-2013 Video Store Movie Totals and Game Revenue Components:      History & Projections 1997-2005 Video Store Movie Totals and Game Revenue Components: Projections 2006-2013 Data Points from AMR's Video Rental Model: 1981-2013 VHS Rental History and Projections YE VCR-Installed (HH) Avg. VCR-Installed Homes Annual VHS Rental/Avg. VCR HH Total VHS Rental Transactions Avg. Rental Rate VHS Rental Consumer Spending Total VHS Units Shipped to Rental Pipeline Units Shipped VHS Rental Inventory Units Retired Industry VHS Rental Inventory Maintenance Units Shipped Total VHS Supplier Rental Revenue DVD Rental History and Projections Unduplicated DVD HH Penetration of TV HH YE Set-Top DVD HH DVD Set-Top Penetration of TV HH Seas. Adj. Avg. DVD Set-Top HH Annual DVD Rentals Per Avg. Set-Top HH DVD Set-Top Rental Transactions Average Rental Rate Set-Top DVD Rental Cons. Spending' Game & PC DVD Rental Turns Game & PC DVD Rental Spending Total Traditional DVD Rental Turns Total Trad'l. DVD Renal Con. Spend. Year End Subscription Rental HH Seasonally Adj. Avg. Subs. Rental HH Monthly Discs Rented/Avg. HH Subscription Rental Turns Average Monthly Subscription Fee Subscription DVD Rental Spending YE DVD Rental Stores Total Industry Inventory Total Pipeline Discs Sold Studio Rental Pipeline Revenue Maintenance Discs Sold Studio Rev. from Maintenance Discs DVD Rental Totals Total DVD Rental Transactions DVD Rental Consumer Spending DVD Rental Units Shipped DVD Rental Supplier Revenue Total DVD Rental Marketing Expense DVD Rental Manufacturing Expense DVD Rental Contribution Total Video History and Projections YE TV HH YE Undup. Video HH Penetration of TV HH Total Video Rental Transactions Total Video Rental Spending Trad'l. DVD & VHS Rental Spending Total Video Units Shipped to Rental Studio Video Rental Revenue Total Rental Marketing Expense Total Rental Contribution Video Store Movie Revenue Components Traditional DVD & VHS Rental Spending Subscription DVD Rental Spending Total Video Rental Spending Maintenance Discs Shipped Shrinkage/Retired/Brokers/Etc. Units PV Discs Sold to Consumers Average PVD Price Consumer PVD Spending Maintenance Tapes Shipped Reduction in VHS Inventory Shrinkage/Retired/Brokers/Etc. Units PV Tapes Sold to Consumers Average PV Price Consumer PV Spending Traded Discs As % of Current Year New DVDs Sold DVDs Traded in Video Stores Consumer Spending Per Traded DVD Consumer Spending on Traded DVDs Cons. Spend. o Traded DVDs + PVTs Total Video Sell-Through Cons. Spend. Video Store Share of Video Sales Video Store Sales Revenue Consumer Rental + PV + Trading Spending Total Video Store Movie Rev. (Inc. Sales) Studio Video Rental Revenue Studio Revenue From Video Store Sales Total Studio Rev. From Video Stores Retail Gross Profit From Movie Business Retail Margin on Movie Business Game Revenue Components Avg. Annual Unduplicated Game Using HH Annual Game Rentals/Avg. Game HH Traditional Game Rental Transactions Avg. Rental Rate Traditional Game Rental Spending Avg. Subscription Game Rental Homes Average Monthly Subscription Fee Subscription Game Rental Spending Trad. + Subs. Game Rental Cons. Spending Used Games Sold at Video Stores Spend. On Traded Games at Video Stores Total New Game Consumer Spending Video Store % Game Sales Video Specialty Game Sales Rev. Game Rental + Trade Rev. + Sales Video Store All Revenue Totals Video Store Movie & Game Revenue