U.K. DVD/Blu-ray Rental Market ‘Expected to Plunge’

EL SEGUNDO: The closure of about half of Blockbuster’s stores in the U.K. is set to cause a 22-percent drop in Blu-ray and DVD rental revenues in the country to £202 million this year, according to IHS.

DVD rentals will drop 53.2 percent to 15.4 million, and Blu-ray rentals will take a larger hit, dropping 61.3 percent to 2.8 million. By the end of the year, there will be 264 Blockbuster stores operating in the U.K., down from 530 in 2012 and 892 in 2006. Physical media rental revenues are expected to continue to fall over the next few years, reaching £172.7 million in 2017, IHS predicts.

“The year 2013 is set to become a watershed for the U.K. video rental market as a result of the wholesale closure of Blockbuster UK stores,” said Tony Gunnarsson, senior video analyst at IHS. “The massive downturn in the store-based video rental market represents a significant loss to the video market and will result in a major decline and radical transformation of the U.K. video market overall. From 2013 on, the U.K. physical-video rental business increasingly will be dominated by online rent-by-mail subscription services.”