Online video rental grows; stores close

Stan Beer
Wednesday, 18 July 2007 11:21

Your IT - Home IT

If we are to believe ASX listed online DVD rental crowd Quickflix , the bottom is falling out of the bricks and mortar video rental business while online video rentals is a booming business. However, Quickflix also claims that the video downloads business is struggling.

Quickflix operates an Australia-wide online video rentals service, which enables customers who pay a monthly sunscription fee by credit card to order rental videos online and receive them in the mail.

According to Quickflix, a 97% increase in growth to more than 18000 subscribers in the past 12 months highlights fundamental changes occurring in the video rental market in Australia at present with a shift away from high street video stores evident.

Quickflix points to an IBIS World industry report, released in January, which showed that by the end of the current financial year the number of video stores in Australia is expected to fall for the sixth consecutive year to 1389 from 3181 in 91-92 and almost 1.5% less than the previous year.

According to Quickflix, the IBIS report also shows video store revenues are drying up, hit by a 5% decline this year with a further 20% fall predcited over the next five years.

Quickflix also poured cold water on video downloads, pointing to Reeltime Media’s recent share price doldrums. No doubt, overseas tech giants like Apple and Amazon, who are getting into online video downloads in a big way would beg to differ.