With online DVD retailers such as ScreenSelect, Video Island and LOVEFiLM.com flooding the press with trial offers, consumers are beginning to understand that they don't have to walk up and down crowded shopping aisles in search of their night's viewing.
UK movie lovers spent £450m on rentals in 2003 and for the first time borrowed more DVDs than videos - 86.8 million DVDs to 69.1 million videos.
Although the UK online DVD market is still in its infancy - compared to the US where Netflix has a five per cent share of rentals and 1.5 million members - several operators are preparing to make a PR splash.
Tapping the market
Online rental companies generally charge weekly or monthly membership fees, with free postage, and allow customers to keep a set number of DVDs for as long as they want.
'It is such a new concept that we can't really do the same sort of PR as the high-street rental companies,' says Cow co-founder Dirk Singer.
Cow handles PR for ScreenSelect, which launched last October, having swallowed up Britain's first online operator, the 1999-founded In Movies.
'We are concentrating on two areas,' says Singer. 'First of all, education - getting journalists to try it themselves, and doing media education tours.' He claims ScreenSelect has more than 100 national journalists trialing its service.
'Secondly, we are driving numbers by setting up a range of reader offers with consumer magazines and national newspapers,' he adds, listing The Sunday Times, Total Film, T3 and Web User as titles it has used. Offers centre on free trial periods because, Singer says, the US experience suggests churn rates are very low.
Singer says the primary PR target is ABC1 males: film and consumer technology fans. At such an embryonic stage, the online industry needs to concentrate on its core audiences, he says.
Starfish Communications joint managing partner Sally Fearfield, who handles PR for LOVEFiLM.com, agrees. She says the online market's primary target of early adopters is comprised largely of affluent males aged 25 and over.
She claims core users are 'influencers' looking for something more cerebral in their film experience. She adds that ease of delivery is important and value is more highly regarded than price.
LOVEFiLM.com, backed by venture capital organisation Arts Alliance, will spend £100,000 on PR in the coming months and, according to Fearfield, this figure could rise to £250,000 by the end of 2004. She says LOVEFiLM's PR strategy centres on three main areas - guerrilla, media relations and subscription offers - and has already executed promotions with TimeOut, The Sunday Times' The Month insert and Metro. For the trade audience, she says the focus is on seeking new media partnerships and building the corporate brand.
A key PR objective for Starfish is to position LOVEFiLM as more than just a rental mechanism. Fearfield says it aims to become an information hub for film lovers and will create 'all sorts of extended online editorial' to make LOVEFiLM 'the intelligent voice of film. Unique site content will build the brand's credentials, and will use A-list celebrities and directors as contributors. Fearfield suggests this is a key differentiator between LOVEFiLM and high-street operators, which are focused more on catering for mainstream consumers in mass numbers.
Education and consolidation
As Netflix's US experience illustrates, the online rental market will be more attractive to serious movie lovers. According to Singer, 12 per cent of US rentals of independent films go through Netflix, well above its overall market share. 'High-street rental stores encourage customers to be more conservative because with the charge structure you need to make your choice count,' he says.
Total DVD editor Chris Jenkins says there is a lot of activity and excitement surrounding online rentals, and believes it will establish itself in the UK, but suggests consolidation is inevitable and Blockbuster is preparing to move.
'There are a lot of people getting into it but they will be dropping out once the big players enter. None of them has a unique selling point,' he says.
Choices Video responded to the online threat by launching ChoicesErental.com last October, copying the structure of monthly membership fees and no late penalties. ChoicesErental director Jan Fuller says that while the online offer is difficult to communicate, the market is growing very quickly and Choices views it as a positive step. She adds that the large number of companies operating are speeding up the education process, but inevitably consolidation will only spare wellrecognised brands.
Blockbuster has an online service, but has not adjusted its pricing structure.
Merrigan Twelves, director of Blockbuster consumer PR agency Attenborough Associates, says its PR is 'designed to drive foot-fall in-store'.
The rental giant is unlikely to maintain this approach for long though, with all indications that online rental in the UK is here to stay.
WILL THE UK MATCH THE US'S APPETITE FOR ONLINE RENTALS?
- There are about 20 players in the online UK DVD rental market including LOVEFiLM.com, ScreenSelect, Video Island, Webflix, Movietrak, DVD choice, dvd2home.com, Another DVD and Mailbox Movies. The US is dominated by one firm - Netflix
- Royal Mail allows online rental companies to deliver to more than 90 per cent of the UK within 24 hours, a distribution tool US companies do not have at their disposal
- Forty per cent of UK households have a DVD player, predicted to rise to 83 per cent by 2008, according to the Consumers' Association
- In the US, late fees made up 12 per cent of total consumer rental spending in the first half of 2003, according to Video Store Magazine
- In 2003, UK consumers spent £95m more on renting DVDs than in 2002, making 86.8 million transactions.