No Slump in the December Rental Market : Retailers report fair to better-than-expected business over the holidays.

While retailers in general saw business slump during the holiday season, video retailers report better-than-expected to fair video rentals.

Video rentals started slowly in September and October, picked up a bit in November and closed with a strong December, according to several video retailers across the country contacted by The Times.

“Business was spectacular,” said Brad Burnside of Evanston’s Video Adventure chain. Peter Margo, purchaser for the 160-store, New Jersey-based Palmer Video chain, said business was good in December: “Much better than expected.”

But John Thrasher, product manager for the Sacramento-based 97-store Tower chain, reported that “rentals were down for us 5% to 10% in December and, over the last three-month period they’re down 5%.”

A few other retailers around the country reported business down too, but not by much.

“Some video retailers were anticipating doing horrible business because of the economic problems,” Thrasher said. “So they’re happy with slight gains or slight losses--which are better than big losses.”

Most video retailers contacted found a December pattern holding: slow business early in month, when most people are preoccupied with shopping, with business peaking at the end of the month as families get together and look to rent movies for entertainment.

Video Adventure said it did record business New Year’s Eve, which, for some retailers, is their biggest day of the year.

Video retailers happy with holiday rental business said more appealing titles would have helped. They complained that the biggest December releases--”Dick Tracy,” “RoboCop 2” and Gremlins 2”--weren’t as strong as they would have liked. Many reported their biggest rental was “Pretty Woman,” a holdover from fall that also is among 1990’s top box-office moneymakers.

“Tracy” set a sales record for movies that are rental-priced (retailing in the $90 range). Bill Mechanic, president of Disney’s worldwide video operation, said Disney sold more than 479,000 (about 40,000 more than “Three Men and a Baby,” the previous rental-priced leader) to video outlets. “It’s been doing well with adults and kids who see it as a comic-book adventure,” he said.

Palmer’s Margo, however, said that while “Tracy” is doing good rental business, it’s not a blockbuster. “For video retailers, it’s an A title but not an A-plus title. It’s not going to pull people into video stores like ‘Die Hard 2.’ The problem is that ‘Tracy’ is the only real big title to come out in the last few weeks. ‘Tracy’ by itself isn’t going to have people flocking to video stores.”

Once again, video retailers complained that they were largely excluded from the sales market, which is generally huge before Christmas, with people buying videos as gifts.

“The discount stores are selling ‘Pretty Woman’ for under $14,” said Margo, who estimated that video retailers handle only 6% to 7% of all video sales. “You can buy titles, like ‘Total Recall’ for $14 to $15 at supermarkets and gas stations. Most video stores can’t afford to sell $20 to $25 movies that cheaply. So people buy these titles at discount stores instead. The average video retailer makes his money in rentals. But there’s a big sales market out there that most video retailers aren’t a big part of.”

Some retailers, however, reported doing decent sales business. “We finished the year with a 2% gain in sell-through (video sales),” said Video Adventure’s Burnside. “But we’re very aggressive in the sales market. But most stores are too busy with rentals to bother with sell-through.”

This year, many video retailers may be crying the blues at the end of January--traditionally the strongest month of the year for video stores.

“There aren’t any A-plus titles this January,” said Palmer’s Margo. “ ‘Die Hard 2’ comes out at the very end of the month so it doesn’t really count. ‘Young Guns II’ (due mid-month) is a genre film with limited appeal. It will go good but not great. I don’t look for ‘Ford Fairlane’ (just out) to do much rental business.”

Tower’s Thrasher agreed: “It’s not the strongest slate of rentals I’ve ever seen. January may be a very slow month.”