While the video-rental market in the US is being threatened by low-priced DVDs sold by discount retailers like Wal-Mart, the industry here is suffering from a slow economy and rampant piracy, an executive at Blockbuster Taiwan said yesterday.
"The nation's video-rental industry has suffered a continuous decline for the past two or three years as economic sluggishness has caused people to spend less on entertainment," said Darrel Lee (
Blockbuster Inc, the world's biggest video-store chain, with over 8,500 outlets, announced late last month that it is exiting the Hong Kong market and will drop plans to enter the Chinese market.
"We saw no growth in our sales last year in Taiwan," Lee said.
"The situation is not getting better this year, as the estimated value of Taiwan's video-rental market may drop 10 percent to around NT$3 billion this year" he said.
Blockbuster entered the Taiwan market in 1997. It has become the nation's largest video-rental chain, with 126 outlets and a 40 percent market share.
While Blockbuster's local business is stagnant, the US operation is facing declining revenues on account of competition from low-priced videos.
Blockbuster's major shareholder, Viacom Inc, the media conglomerate that owns MTV and CBS, announced earlier this week that it is planning to sell its 81-percent stake in the company and is taking a US$1.3 billion charge to reflect the declining value of its video-rental business.
The problems ailing Blockbuster in the US are different from the ones experienced by local video-rental operators because shopping habits and population density in Taiwan and the US are different, a local video-rental chain official said.
"People in the US may prefer to buy videos instead of renting them because returning videos can be a troublesome thing for those living in areas with sparse population and few shops," said an official at Asia 1 (
"The price of buying a DVD can run as high as NT$900 here," the official said.
Renting costs only NT$100 at the most and is comparatively beneficial for consumers in densely-populated Taiwan," the official said.
What is really damaging the industry here is the rampant piracy problem, Lee said.
"In addition to the slow economy, pirated videos that used to be sold in night markets can now be downloaded from the Internet for free, further worsening the situation," he said.
It has been reported that the piracy problem is what forced Blockbuster to withdraw from Hong Kong, but Lee dismissed that claim. Instead, he attributed the closing of Blockbuster's Hong Kong operation to high operation costs, including rents.
But piracy remains the biggest concern for the industry, another industry veteran said.
"Pirated videos may account for over 50 percent of all digital video discs and compact discs that you can find in Taiwan, which greatly threatens the industry," said Joseph Yuen (
Deltamac imports videos from many of the world's largest movie producers and distributors, including 20 Century Fox and New Line Production, Inc.
"We do hope the government can put more effort into combating piracy and protecting the industry from sales losses caused by this crime," the official at Asia 1 said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS