Competition in the Movie Rental Industry

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took on trait, Market size and Growth for the presentation. We picked this as our number one trait as this was where we would get our primary information for our report from. When we read through the original case study, one of the sentences that grab the reader’s attention is that the DVD player is the most successful consumer electronic product of all time; more than 85% of U.S households have a DVD player. This gives a clear indication the market size that Netflix and Blockbuster battle for market leadership. According to AMR (Adams media research) Movie DVD sales and rentals amounted to $24.9billion market in the U.S in 2007 that was up from $22Billion in 2002. Movie rentals were the most popular means of obtaining movies and the movie rental industry consisted of four segments: 1. In store rentals (2007 revenues of $5.8 billion)

2. Rentals via mail ( 2007 revenues of $2 billion)
3.Video on demand accounted for $1.3 billion )
4.Vending machines $400 million.
AMR projected that the online subscription spending for rental DVDs would increase by as much as 68% between 2007 and 2011 rising to about $3.2 billion. Sales of movies on discs have been undercut by the rise of low-cost rental options, such as Coinstar Inc's kiosk chain Redbox, which rents DVDs for $1 a day and online subscription, services such as Netflix Inc. "Those two sectors of rental have really been growing, and causing people to hesitate about how many discs they're going to buy," Adams said. Movie disc rentals in 2009 grew to $8.15 billion from $8.11 billion in 2008.This shows no sign of decline either with less people buying DVD/Blu Ray then every before , the rental industry is thriving.
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