The Bottom Line: DVD Rentals Good for Profits

Oct 01, 2003
George Anderson

By George Anderson

The Video Software Dealers Association (VSDA) 2003 Benchmarking Report says DVD rentals helped independent video rental stores to increase average net profits by five
percent last year.

“In the late 1990s, many independent video stores were buffeted by the intense competition in the video rental industry,” said Bo Andersen, president, VSDA. “Then DVD came on
the scene and was enthusiastically embraced by the American consumer as a product both to purchase and to rent. This report shows that the DVD phenomenon has allowed independent
video stores to intensify and improve their competitive position.”

Moderator’s Comment: Have DVDs enabled independent video retailers to improve their competitive position as maintained by the VSDA? What is the future
of video rental retailing?

The number of independent video retailers we see open for business does not indicate any type of resurgence. The future would still appear to rest with
Netflix, Blockbuster, Wal-Mart and other large operators.
Anderson – Moderator

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