Overview While DVD sales fell sharply last year, rentals rose 8.2%. Brick-and-mortar video rental stores accounted for 47% of the market between January and October in 2009; down from 63% in 2008. Rent-by-mail grew to 33% of the market in 2009, and vending machine rentals grew to 20%.

Overview Video rentals from all sources have declined from a 2001 peak of $10.4 billion to $8.2 billion in 2008. Subscription service Netflix added 1.6 million subscribers in the last quarter of 2009, generating a Q4 profit of $31 million. Video vending company Redbox installed 22,500 new dollar- rental kiosks last year.

Overview Consumers also dropped cable services and videos-on-demand (VOD) that cost around $4 per movie in favor of rentals. The chain Family Video nearly doubled in size and operation since opening in 2003, and currently has 600 stores in 18 states.

Overview 2009 Top Five DVD Rentals: Rank Title Release Date 1 The Curious Case of Benjamin Button 05/05/09 2 Taken 03/12/09 3 Seven Pounds 03/17/09 4 Eagle Eye 12/27/08 5 Gran Tornio 06/09/09 Source: Rental

Movie Buffs A tight economy means fewer DVD purchases; consumers will rent movies instead. 66% of broadband-enabled Netflix subscribers stream movies; 8% watch exclusively through a DVD player.

Marketing Options Even with the increasing availability of broadband streaming and cable VOD, many consumers want the physical DVDs. Family Video’s business model relies heavily on customer service.

Marketing Options The successful chain also offers monthly all-you-can-rent options or package deals. Independent video stores often offer a more eclectic selection to compete.

Finding Revenue Growth can be realized by returning to the roots of the in-store customer experience built on value, service, and good products at fair prices. Mom-and-pop video rental stores are seeing growth by serving niche markets interested in foreign, indie, and classic films. Other independent rental stores are expanding their customer base by finding revenue from corporate clients.

Looking Forward Technology will continue to perpetuate change, like online DVD rentals and streaming content over the family's television. In 2007, 73% of consumer spending on movie rentals occurred at brick-and-mortar stores. In 2008 the figure dropped to 59%. One expert predicts that rentals from traditional stores will stabilize, holding a 48% market share by 2013.

Looking Forward Video stores will remain popular places to browse physical media and get last-minute videos for same-day or next-day viewing. The evolving video store will reinforce the entertainment destination value through more creative merchandising, marketing, and product diversification.

Advertising Strategies With support from the Video Buyers Group, video stores will be helped from ads that underscore the advantage of renting movies and games from traditional brick-and-mortar dealers. The campaign aims to spread the message to consumers that dollar rentals from vending machines devalue the industry.

Advertising Strategies Television advertising provides the optimum platform for video stores to promote the latest film releases for the entire family. Independent video stores can use television advertising to promote the value of browsing through physical media. Video stores can share in television advertising expenses by partnering with local take-out restaurants and draw in customers by offering "dinner-and-a-movie" discounts.

Advertising Strategies When targeting niche markets, place TV ads on relevant programming, on a consistent, year-round basis. For example, stores that stock classic movies should advertise on family programs during primetime, while stores that have a large selection of documentary films should place ads during the local news broadcast.

There are three simple reasons! Why TV? There are three simple reasons!

Why TV? 1. Your customers and potential customers use it — viewing daily for long periods of time. 2. TV’s attributes of sight, sound, motion, and emotion let you best communicate your message to these people. 3. Television works in dollars returned!

Why TV? Remember, only television can give you: The right message To the right people At the right time In the right place!