Blu-ray a driving force in Europe video market

Report: Dollar kiosks unlikely to provide boost similar to U.S.

LONDON -- Blu-ray rather than overnight video rental kiosks may provide a welcome fillip for the beleaguered European video rental market, according to research published Tuesday.

A report from analysts Screen Digest suggests that the high-definition Blu-ray Disc format could play a key role in the European rental sector over the next few years.

But while the U.S. video market is enjoying a minor renaissance on the back of $1-a-night video rental kiosks, the report warns that such a boost is unlikely to be mirrored in major European territories.

"The concept of rental kiosks was actually invented in Italy about 20 years ago and was quickly adopted across much of southern Europe. But unlike in the U.S., European kiosks tend to be operated by traditional rental stores and are seen as an extension of their business -- they don't tend to compete so aggressively on price", said Screen Digest head of video Helen Davis Jayalath.

The report also suggests rental is not strong enough in any European territory to support a substantial $1 (or €1 or £1)-a-night business.

In 2008, Europe's 135 million DVD homes rented just 472 million times, or 3.5 times per household. European consumers could be spending as much as €461 million ($648 million) a year on renting the Blu-ray format by 2013, according to the research.

That is on top of the forecast €3.2 billion ($4.5 billion) they will be spending on buying movies and TV series on the high-def discs, Screen Digest said.

The total European Blu-ray Disc market in 2013 is predicted to be worth €3.7 billion ($5.4 billion), compared with DVD spending of €5.3 billion ($7.8 billion).