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74 Tsutaya Retail Chain Stores to End Video Rental Business by October 2023
posted on by Alex Mateo, Crystalyn Hodgkins
Top Culture Co., Ltd. — which operates 74 Tsutaya retail chain stores in Tokyo and nine other prefectures — announced in July a medium-term management plan to end video rental business at its stores by the end of the fiscal year ending in October 2023. This is the first time that any of the franchise owners of Tsutaya stores are ending their video rental business.
Sales of the video rental business in Top Culture's Tsutaya stores have decreased to about 20% of what they were over 10 years ago at their peak in October 2011. In addition, more consumers have been using digital distribution services due to the new coronavirus disease (COVID-19) situation.
Top Culture will rework the rental floor spaces in its Tsutaya stores into co-working spaces and areas for general merchandise sales with more expected growth. The company anticipates that operating income will double in two years as compared to the fiscal year ending in October 2020.
Additionally, news website Nikkei Asia reported on Saturday that Culture Convenience Club (CCC), which operates the overall Tsutaya retail business, had a net loss of 14.5 billion yen (about US$126 million) in the fiscal year that ended in March 2021. The organization has cut the number of its stores to about 1,100, down 400 from its peak. CCC founder and president Muneaki Masuda told Nikkei Asia that it is "moving quickly to pivot" about 900 locations that offer rentals into hybrid stores. CCC opened its first shared workspace area in a store in Tokyo in December.
CCC also plans to open high-end Tsutaya bookstores and cafes in Southeast Asia, starting with one in Kuala Lumpur in Malaysia this spring. Nikkei Asia reports that Amazon has yet to dominate book and video sales in Malaysia and other Southeast Asian countries.
The Japan Video Software Association (JVA) and Digital Entertainment Group Japan (DEG Japan) released in May 2021 their report on the video market in Japan from January to December 2020. The report revealed that the Japanese video market was worth a total of 687.4 billion yen (about US$6.19 billion), a 21.9% increase from 2019. The rental market, however, amounted to 104.1 billion yen (about US$938 million), a 17.3% decrease.
In 2019, paid digital video content's revenue overtook physical home video sales for the first time.
Sources: The Niigata Nippo, Top Culture (link 2), Nikkei Asia (Shunji Onuki), Yomiuri Shimbun
