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In the archive
Video and online markets

Number and characteristics of video hire businesses of various sizes, 1999/00

Most businesses in the video hire industry had less than 10 employees, and 95 per cent had less than 20. There were 10 businesses employing 50 or more people. These 10 large businesses, some of which were franchisors with many franchisee businesses, accounted for 21 per cent of employment, 29 per cent of income and 22 per cent of the operating profit before tax of the industry. Overall 75 per cent of industry income was sourced from the hire of videos, but this proportion was 67 per cent for these 10 large businesses, with 6.4 per cent of their income coming from the sale of videos, compared to the industry average of 4.8 per cent.

The most profitable businesses in the industry were those businesses employing 20–49 persons, which recorded an operating profit margin of 11.2 per cent. In comparison, businesses employing 50 or more persons recorded an operating profit margin of 5.5 per cent.

The high incidence of casual employees in the industry was reflected in the average annual labour costs per employee of $12,500. The average labour cost per employee increased by size of business with businesses employing 50 or more persons having an average labour cost per employee of $17,200.

  By business size (no. employees) All businesses
0–4 5–9 10–19 20–49 50+
No. businesses 370 478 260 47 10 1,166
% businesses 31.7% 41.0% 22.3% 4.0% 0.9% 100%
Average labour cost per employee $13,700 $10,400 $11,400 $11,100 $17,200 $12,500
Operating profit margin *7.1% 8.2% 6.5% 11.2% 5.5% 7.2%
Video rental as proportion of total income 83.8% 77.6% 76.0% 77.5% 67.0% 74.6%
Video sales as proportion of total income 1.9% 4.1% 4.8% 4.2% 6.4% 4.8%
DVD rental as proportion of total rental income 0.8% 1.8% 1.4% 1.2% 0.4% 1.2%
Video purchase as proportion of total expenses 13.5% 13.9% 17.4% 19.9% 3.1% 12.1%

Source: Australian Bureau of Statistics, Video Hire Industry (cat. no. 8562.0) May 2001.

Notes:
*Estimate has a relative standard error of between 25% and 50% and should be used with caution.

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