SBHD: Contrary to popular belief video rentals have been declining, but Blockbuster Video is launching an attack against both satellite and terrestrial TV.
I have good news and bad news for the commercial television companies. The good news is that far fewer people have been renting videos over the past five years than was originally thought. The bad news is that the world’s biggest video rental company is doing something about it.
Figures to be published later this month by the British Video Association show that the steady decline in the video rental business has been more severe than previously reported. The BVA has reduced substantially the revenue figures that appeared in its 1994 Yearbook.
The new edition will show that the value of the rental market has declined steadily from Ãº569m in 1989 to Ãº457m in 1993, and Ãº438m last year. A year ago, the figure for 1993 was given as Ãº528m, a difference of Ãº71m. In contrast, the retail video market is now seen to have overtaken the rental business, with sales of nearly Ãº700m last year.
The report explains: “Since the peak year in 1989, the rental market has declined in the face of competition from cable and satellite, and from the booming retail market. As a result of this there has been a shake-out of libraries, with some 1,500-2,000 having closed over the past couple of years, and BVA market sizes have been adjusted to take account of this.”
Not before time, the biggest rental company is trying to reverse the decline. Blockbuster Video, part of the giant Viacom media group in the US, has just launched a Ãº14m advertising campaign to try to woo viewers back into the rental store. After years of multi-million pound campaigns for BSkyB – hammering home the message that the best way to watch films on TV is to buy a dish, instead of trudging round to the video store only to discover they’re out of the title you want – Blockbuster is planning to make renting a video appear smart.
“Video rental has become virtually a distress purchase,” says Vernon Salt, Blockbuster’s marketing manager. “When you can’t think of anything else to do, you rent a video. We want to bring back the excitement of new releases, and raise the profile and energy of video rental as a legitimate leisure pursuit.”
But before arriving at this stage, Blockbuster has had to get the product right. Too often, not only have rental stores run out of the most popular titles, they have also been less than welcoming. It has been hard to find the film you want among row on row of old titles, and the shops were often shut when you wanted to return the video. With a new management team, recruited from Burger King and Pizza Hut, Blockbuster has addressed these problems.
Now that it has taken over the Ritz video store group, it has been branding all its shops under the Blockbuster name, with the same promise of “home entertainment for all”. It says its stores carry more copies of the latest releases – up to 100 copies in some of its 85 superstores – as well as video games to rent or buy. It also offers videos for sale, allowing customers to “try before they buy” – giving them back their rental money if they decide to purchase it.
By selling Hagen-Dazs ice cream, confectionery, Coca-Cola and popcorn, it also tries to recreate the cinema experience. The superstores have movie merchandise. The shops are open from 10am until midnight and there are “quick drop” boxes so that videos can be returned 24 hours a day.
But the biggest plus, which the rental companies have neglected to tell anyone about in recent years, is that they are the first outlet through which a new film can be seen on television. Blockbuster’s vice-president Europe, Nigel Travis, says the company will be emphasising this in its advertising campaign. “Six months after a film has gone into cinemas it goes into video rental. Six months after that it goes into retail video, and six months after that it goes to pay TV, which in the UK is satellite. We have a one-year advantage over satellite.” And the advantage over ITV is even longer.
Kate Lynch, head of research at Leo Burnett, says the video rental shops pose another serious threat to satellite and cable – they’re a lot cheaper. “If people hire one film a week at around Ãº3, that comes to Ãº12 a month. The subscription for movies and sport on satellite comes to around Ãº25 a month, and people who can’t afford that will be going to video stores such as Blockbuster.”
But the bigger threat is to the mainstream terrestrial channels. Lynch says: “ITV has lost share among the 16 to 34-year-old audience and among young families because of the much better competition, particularly on movies, from satellite TV and video shops.” Fortunately for advertisers, she says, they can advertise on the movie channels and on videos – although not within the film itself. BARB can now measure the playback of commercials, discounting any fast-forwarding.
Martin Bowley, managing director of Carlton Sales, remains bullish, saying ITV is still the most-watched channel by a long way, even in homes with cable and among video viewers. He says ITV will continue to invest heavily in its peak time drama, which he maintains is the British equivalent of Hollywood.
“You have to remember that viewers mainly use their videos to play back programmes, not to watch rented videos. One episode of Kavanagh QC on video playback had more viewers than the combined rental of Schindler’s List and Four Weddings And A Funeral,” he says.
The real problem for ITV, though, is that it is now having to carry commercials for two companies, which hope to lure away its viewers, while keeping them in front of the TV set – Blockbuster and BSkyB. As well as the video rental campaign – which has “The Entertainment Team” showing what’s on offer at Blockbuster – ITV is also carrying a new commercial promoting the Sky multi-channels package, featuring Corbin Bernsen of LA Law. The first screening was booked into the Sunday night James Bond film.
ITV draws the line at advertisments that tell its viewers what time to turn over to its rival’s top programmes, so the more specific, targeted Sky ads are going to be shown in cinemas. But in a few weeks’ time, it’s likely to be carrying ads that will tell people they can now watch Oscar-winner Forrest Gump on TV – courtesy of their local video rental store.
Even if the film is out-playbacked by the top ITV dramas, it will still help erode the viewing of mainstream channels.
Torin Douglas is BBC Radio’s correspondent.