Video sales now outpacing rentals Lower prices help boost purchases

March 10, 1992|By Ed Lopez | Ed Lopez,Knight-Ridder News Service Michael Dresser of The Sun's Business staff contributed to this article.

Once viewed as too pricey, videocassettes are increasingly accepted as something to take home for keeps.

Last year, purchases of pre-recorded videocassettes took their sharpest jump, reaching an estimated market value of $4.6 billion, according to Alexander and Associates, a New York research firm.

Indeed,the company's survey of consumers found that the dollar value of video purchases grew more than 23 percent last year while rentals actually dropped more than 8 percent.

Tom Adams, a video analyst with Paul Kagan and Associates in Carmel, Calif.,blamed the weak showing of video rentals last year largely on the Persian Gulf war and the weak economy.

He said that his company's estimates,based on surveys of retailers,showed the video rental business staying relatively flat last year.He projected that rental " growth should be in the about the 5 to 6 percent range for the next couple of years."

In contrast, video purchases -- known as "sell-through" in the industry -- are growing by about 15 percent annually.

Sales could be further stimulated as Blockbuster Entertainment Corp., the nation's largest video chain, promotes sales more aggressively. With new store displays and heightened advertising, the Fort Lauderdale, Fla.-based company made a major push into sell-through in the fourth quarter of 1991.

Lower prices have sparked the growth of video sales.

John Potter, an area manager who supervises six Baltimore-area Blockbuster franchises owned by UI Video Systems Inc. of Denver, said his stores' sales were in line with the national pattern but were not as strong as sales in other regions.

The hot title now, he said, is "101 Dalmatians," which Disney is releasing for a limited time.

Mr. Potter said that other strong-selling titles in the Baltimore area include "Home Alone," "Ghost" and "Robin Hood, Prince of Thieves."

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