The Video Software Dealers Association reported that revenues from DVD rentals have been trailing off since 2001, when they peaked at $8.42 billion, and are their lowest point since 1997. But rentals of adult videos, on the other hand, remain brink, with estimates as high as $3 billion.
“Pornography has been surging every year, in whatever form, whether it’s magazines, DVDs or anything,” Video Business magazine Editor-in-Chief Scott Hettrick said.
Larry Stultz, owner of the Videos 2 Go, said adult DVDs make up a small portion of his store’s roughly 5,000 titles, but account for about half of all sales and rentals.
“It helps quite a bit,” he said.
Since the 1980s, the number of video rental outlets has stayed steady at around 30,000, but the number of independent stores has dropped by almost two-thirds, mostly due to the growth of chains such as Blockbuster and, more recently, online rental services such as Netflix, which now boast 3.2 million monthly subscribers.
According to Tom Adams, president of a Adams Media Research, mom-and-pop retailers do have several advantages in that Blockbuster refuses to carry adult material and renters often are reluctant to have porn delivered to their homes.
But new technologies such as VOD, Internet downloads and cable pay-per-view also are eating into brick-and-mortar rentals, and some analysts are already sounding a death knell for the over-the-counter DVD rental business.
“The rental of a movie will happen through alternative distribution platforms, not free-standing video rental stores,” Warner Bros. home video honcho Warren Lieberfarb said.
Others don’t see the future looking quite so bleak for the DVD. Kagan Research predicts the DVD market will grow by 16 percent in the coming year, with rentals projected to rise 12.5 percent.
“It’s always been a business where the smart, resourceful local entrepreneur can be successful,” Adams said.
