Tsutaya's DVD Rental Biz Off to Good Start
January 7, 1998 (TOKYO) -- Business is brisk at two
Tsutuya digital video disk (DVD) rental shops that started
renting DVDs Dec. 19, 1997 in Shinjuku and Sangenjaya, Tokyo.
The rental shops are operated by Culture Convenience Club (CCC)
Co., Ltd.
"We are expecting monthly sales to amount to one million yen
(US$7,520), an initial target for a Shinjuku shop, if we can keep up the
current pace of sales," said Fumio Kurokawa, president of Culture
Publishers Inc., a CCC affiliate engaged in the contents business.
Shinjuku is a major electronics district in Tokyo.
"Besides, luckily, the DVD rental business promotes sales of DVD
software products at the shop. Sales of DVD software products have
tripled," Kurokawa added.
Rentals of the 50 DVD players at the two franchise shops also has
been active, with all players rented at some times. The two shops even
had to prepare an additional 20 players. Many customers rented a
DVD player with DVD software since the players are not yet widely
used among Japanese consumers.
When the Tsutaya rental video shops started the rental business, they
had only 55 Warner Home Video titles. However, it is imperative for
the chain shops to add more video titles to their lineups in order to
expand the DVD rental business further, experts said.
Kurokawa explained that his company has obtained approval to include
MGM/UA video software in the lineups at the shops. The content
company also is negotiating with other film companies with the aim of
offering 100 rental video titles by the end of the month.
DVD software developers are generally positive about the rental
business, because it is easy to make sales estimates, said Kurokawa.
He expects the shops to be able to offer 90 percent of DVD video
titles by the spring of 1998.
According to Kurokawa, DVD software developers such as movie
companies are trying to take advantage of the rental service to boost
sales of their software products. For example, the developers sell their
software products at higher prices to rental shops. Some developers
will start selling their products at the shops following success in the
rental business.
The DVD rental service was launched by CCC, operator of the
Tsutaya franchise rental video shops. Manufacturers of DVD-related
products expect the business to expand the entire DVD market. Sales
of DVD players have been lower than initially projected.
The rental business at the two shops in Tokyo is merely a pilot case for
CCC.
The company plans to increase the number of nationwide pilot rental
shops for DVD products to 10, including a shop in Osaka, to gather
fundamental data on the DVD rental business.
The gathered data will be announced at a briefing session to be given to
franchise shop owners scheduled to be held sometimes around March.
After the session, the company will decide whether to start the rental
business at about 920 other Tsutaya shops nationwide.
Related story: CCC Chain Stores Start Renting DVD Software
(Nikkei Multimedia) |
