Rentrak - DVD+Blu-ray 2Q 2011 rental revenue up +5.9% YoY to $1.48 Billion - High-Def Digest Forums
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Old 08-16-2011, 11:24 PM
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Thumbs up Rentrak - DVD+Blu-ray 2Q 2011 rental revenue up +5.9% YoY to $1.48 Billion

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Rentrak: Rental Revenue Up 6%

16 Aug, 2011
By: Erik Gruenwedel



Rev-share company eyes strong second half of the year at video stores

Rental revenue from DVD and Blu-ray Disc movies increased 5.9% in the second quarter to $1.48 billion, compared with $1.39 billion during the same period last year, according to new data from Rentrak.

Portland, Ore.-based Rentrak, which facilitates revenue-sharing agreements between the studios and independent video stores, said the rise in rental was driven by online and by-mail disc services and kiosks. Rental turns for the quarter were up 8.4% to $565 million.

Top 10 DVD rental titles included Little Fockers (Universal Studios Home Entertainment), Tron: Legacy (Walt Disney Studios Home Entertainment), The Green Hornet (Sony Pictures Home Entertainment), The Dilemma (Universal), Harry Potter and the Deathly Hallows — Part 1 (Warner Home Video), I Am Number Four (Disney), No Strings Attached (Paramount Home Entertainment), The Chronicles of Narnia: Voyage of the Dawn Treader (20th Century Fox Home Entertainment), The Mechanic (Sony Pictures) and The Tourist (Sony Pictures).

Top 10 Blu-ray rentals, in order, included: Little Fockers, Tron: Legacy, The Green Hornet, I Am Number Four, Harry Potter and the Deathly Hallows — Part 1, The Dilemma, The Mechanic, The Chronicles of Narnia: Voyage of the Dawn Treader, No Strings Attached and The Tourist.

“While overall brick-and-mortar rentals declined, many of the larger brick-and-mortar stores’ average revenue per store increased versus last year, which indicates that the lesser-performing stores are the ones being closed and the remaining stronger-performing stores are doing well,” said David Paiko, VP of home video with Rentrak. “This news, combined with the announced plans for Blockbuster from its new owner, may mean a more energized brick-and-mortar rental segment for the second half of the year.”
http://www.homemediamagazine.com/ren...nue-up-6-24806
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Old 08-16-2011, 11:27 PM
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I think that was supposed to be 565 million rental turns as in units of rental transactions being up +8.4%.
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Old 08-16-2011, 11:35 PM
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Their numbers are $124 million off from the DEG, unless they are trying to state that $680 million of Netflix's $770 million Q2 revenue was from physical (and only $90 million for streaming).

If that is how they are calculating things, then physical media rental revenue is going to plummet once we get the streaming / disc-by-mail detailed revenue split from Netflix in Q3 and Q4 where at least $528 million (and likely more) of the $1 billion Q4 Netflix revenue is expected to go to streaming (a net decline of $200 million in physical media rental revenue).
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Old 08-16-2011, 11:39 PM
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So disc rental transactions are up, as well as revenue. Does this put to rest the idea that disc rentals were just an afterthought for disc/streaming netflix subscribers?
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Old 08-17-2011, 01:25 AM
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Blu-ray rentals = people not buying discs.

Yay?
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Old 08-17-2011, 05:58 AM
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Originally Posted by PSound View Post
Their numbers are $124 million off from the DEG, unless they are trying to state that $680 million of Netflix's $770 million Q2 revenue was from physical (and only $90 million for streaming).
The only comparison they're drawing is with their own figures for previous years and quarters, which were presumably generated using the same methodology.

There's nothing wrong with you making comparisons between two different sources and questioning how they've come to their conclusions for the sake of discussion. Just bear in mind that for one you're probably not going to get a nice neat answer, and two that you shouldn't constantly use your questioning to try and discount the one providing the numbers you don't like.

The DEG use Rentrak's figures, and I've seen them specifically state that they've revised their figures on the back of a Rentrak revision on at least one occassion.

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Originally Posted by Psound
If that is how they are calculating things, then physical media rental revenue is going to plummet once we get the streaming / disc-by-mail detailed revenue split from Netflix in Q3 and Q4 where at least $528 million (and likely more) of the $1 billion Q4 Netflix revenue is expected to go to streaming (a net decline of $200 million in physical media rental revenue).
I think you're making great claims on the back of a projection from Netflix there.

Firstly, once again you're turning Netflix's expectations into a definate statement - "at least $528 million" of streaming revenue. Netflix will have a better handle on it than you or I, so if they can't describe it as a certainty, neither should we.

Don't forget as well that whatever the percentage of streaming customers is, the most each will be contributing in revenue is $7.99, whereas on top of the base $7.99 price for disks there's the multi disk and Blu-Ray add-ons. Also, I think you've multiplied out the expected number of streaming subscribers by $7.99 to get $523 million, whereas at Q2 end about 1.4 million subscribers were on free accounts. Normally that wouldn't affect your figure that much, but if all the internet angst does transfer into cancellations in Q3 I think it's likely that there'll be a lot more free accounts as they scrabble to get new subscribers on board.

Looking at their expectations, there's several things that immediately jump out where they can easily go awry. These are just the obvious ones;

- They're assuming that the number of cancellations when the price hike kicks in will still leave subscribers essentially at Q2 levels.

- They're assuming that nearly 50% of total subscribers will be willing to pay an extra $6 over pre-increase prices.

- This is possibly them at their most hopeful - they're assuming that they'll go from the ~40% of 22.5 million subscribers using disk-only they reported around April, to 12% of 25 million subscribers in Q3, whilst converting the difference to combo plans at the higher price. I'm sure the ~40% ratio will have fallen due to the popularity of streaming-only with new subscribers, cancellations etc, but that seems a hell of a drop - a difference of about 6 million users between the two data points. It seems unlikely that the rate of conversion of disk-only users to streaming with disk would increase that rapidly on the back of a $6 a month increase. I guess the question is, how do they expect to convert ~9 million disk-only customers down to 3 million in about six months, when disk-only plans have had a 20% drop in price, combo plans a 60% increase, and projected subscriber numbers up only about 2.5 million?

Ray Von
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Old 08-17-2011, 06:14 AM
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Originally Posted by GizmoDVD View Post
Blu-ray rentals = people not buying discs.

Yay?
But that is another explanation for packaged media sell through decline that is still consumers using packaged media of Blu-ray and DVD instead of using Netflix streaming or other digital alternatives.

That's consumers moving to cheap physical rental like $1 Redbox kiosks instead of digital VOD and EST.

It also implies in this economy cheap easy rentals are attractive but many consumers still like OD.

So for physical media we have Blu-ray sell through up, Blu-ray rental up, DVD rental up and only DVD sell through revenues in decline.

It also implies that physical discs are still an attractive option for many consumers and the inexpensive rental alternatives available now with Redbox Netflix disc by mail and the surviving core of Blockbuster is an appealing value to consumers in this economic climate.

Not good in the sense for sell through revenues but its money consumers are still spending on physical DVD and Blu-ray Discs instead of to digital media and the cloud.

Increasing 6% even with box office down means that besides Blu-ray Disc sell through growing in the physical media space that DVD+Blu-ray rentals together are also growing which kinda goes against the discs are obsolete mantra from the digital cheerleaders.

All this happening when Digital was declining in the 2Q DEG stats by -0.27% and EST was down -2.17% in the same period that physical rental improved.


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Old 08-17-2011, 08:12 AM
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Originally Posted by Kosty View Post
Did anyone else notice when we got the latest DEG figures that they've added another $90 million or so of subscription revenue that isn't from Netflix to their Q1 and Q2 totals?

Does Blockbuster have a subscription service too?

Ray Von
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Old 08-17-2011, 08:21 AM
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News Corp (Fox), from last week...

http://seekingalpha.com/article/2865...all-transcript

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We also make sure we are vigilant about attacking practices that undervalue our products, like $1 rentals and building new platforms that fairly value our content. We'll do business with new emerging digital platforms like Netflix, where we establish clear rules about what is library product, we're also engaged with other competing digital companies. However, our priority is to make sure we're thoughtful and do not allow a quick buck to jeopardize the longer-term value of our product.
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Old 08-17-2011, 08:22 AM
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Quote:
Originally Posted by Ray Von View Post

Does Blockbuster have a subscription service too?

Ray Von
Disc by mail? Yes

Digital? Only on a per movie basis, not all you can eat ala netflix streaming
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