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Video and online markets

Items of expenditure for businesses in the video hire industry, 1999/00

Businesses in the video hire industry had total expenses of $559 million in 1999/00. The four major expense items were labour costs of $129 million (23 per cent of total expenses), purchase of goods ($128 million, or 23 per cent of total), depreciation and amortisation ($103 million, or 19 per cent of total) and rent, leasing and hiring expenses of $94 million (17 per cent of total, mostly for premises).

The different methods of acquiring and accounting for videos were reflected in the high expenditure on purchases, on depreciation and amortisation, and on rent, leasing and hiring. Some businesses made a current purchase of videos, i.e. one of the major components of purchases was for videos ($68 million), some of which were for rental and some for resale. On the other hand, many businesses made a capital purchase of videos, for which the expense was recorded in terms of depreciation (i.e. part of the depreciation and amortisation of $103 million); and some businesses rented stock ($16 million) for purposes of on-rental to the public.

Video hire industry expenditure 1999/00

Graph: Video hire industry expenditure, 1999/00. Table following provides the data.
Value ($m) Proportion of total expenses (%)
Total 558.7 100.0%
Labour costs 128.9 23.1%
Wages and salaries 114.7 20.5%
Other 14.2 2.5%
Rent, leasing and hiring expenses 93.5 16.7%
Premises 74.3 13.3%
Videos/DVDs 16.2 2.9%
Other rent, leasing and hiring expenses 3.0 0.5%
Purchases 127.8 22.9%
Videos 67.8 12.1%
Other video-related goods 32.1 5.7%
Food and beverages 27.9 5.0%
Other costs 208.3 37.3%
Depreciation and amortisation 103.4 18.5%
Franchise/group fees 10.2 1.8%
Other1 94.7 17.0%

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

1. Other major expenses included advertising, marketing and promotion expenses of $17 million, electricity, gas and water charges of $10 million, interest expenses of $9 million, telecommunication expenses of $6 million and bad debts of $4 million.