VIDEO RENTAL ROUNDUP

Movie Gallery: RentalsDOTHAN, Ala. -- In commenting on its third-quarter results, Movie Gallery here attributed lower-than-expected earnings to heavy sales of "Titanic," which cut into rental volume. Same-store sales for the period ended Oct. 4 were up 4.6% and cash flow was set to improve to between $5.5 million and $6.5 million from $3.2 million the year before."We are pleased with our same-store

Movie Gallery:

Rentals

DOTHAN, Ala. -- In commenting on its third-quarter results, Movie Gallery here attributed lower-than-expected earnings to heavy sales of "Titanic," which cut into rental volume. Same-store sales for the period ended Oct. 4 were up 4.6% and cash flow was set to improve to between $5.5 million and $6.5 million from $3.2 million the year before.

"We are pleased with our same-store sales and cash-flow performance for the quarter," said J.T. Malugen, chairman and chief executive officer. The company's financial position is also greatly improved, with long-term debt levels reduced to $52 million, down from $73 million at the same time in 1997, he said.

"Earnings per share, however, will be below the company's expectations due primarily to the larger-than-expected sales volume of the hit 'Titanic,' which somewhat cannibalized the more profitable rental volume of that film and others," Malugen said. Movie Gallery, which owns and operates a total of 835 video specialty stores, with an additional 106 franchisees and licensees, will continue to repurchase its common stock, he said.

Meanwhile, Rupert Murdoch, chairman and chief executive officer of News Corp., parent of Twentieth Century Fox, told attendees of the company's annual meeting earlier this month that "Titanic" would sell more than 40 million copies worldwide. Fox has the international distribution rights to the film. Paramount distributed the title theatrically and for home video in the United States.

Blockbuster's Revenues Rising

DALLAS -- Blockbuster Entertainment here increased its revenues by 19% for the three months that ended Sept. 30, said Sumner Redstone, chairman of parent company Viacom, New York. While this surpasses the expectations of financial analysts, profit growth is lagging because of spending aimed at increasing market share, according to press reports.

"It is true that we could have brought more to the bottom line in the third quarter than we have," Redstone said. Speaking at an investment conference in New York, he did not provide details about Blockbuster's profitability.

Redstone attributed the "huge success story" of Blockbuster to revenue-sharing deals struck with the studios that enabled the retailer to stock movies in greater depth. Titles brought in through revenue sharing now represent 90% of Blockbuster's rentals, compared with 25% in the first quarter of the year, he said.

"Every important measure of revenue performance at Blockbuster is up, and up strongly in the third quarter, clearly reflecting Blockbuster's continuing revitalization and the success of our revenue-sharing agreements with the Hollywood studios. In the third quarter, transactions are up 19%, new members increased 20%, membership activity is up 12% and retail sales, driven by the success of 'Titanic' in home video, are up 27%," said Redstone in a prepared statement.

Top 10 Supermarket Video Rental Titles

Rank Last

Wk Title (Wks Out)

City of Angels (4)

1 2 Warner $107.37

Primary Colors (5)

2 3 Universal $107.37

A Perfect Murder (1)

3 N Warner $107.37

Mercury Rising (3)

4 4 Universal $107.37

Lost in Space (1)

5 N New Line $22.98

Wild Things (5)

6 5 Columbia $105.77

Deep Rising (7)

7 6 Buena Vista $104.16

Paulie (2)

8 8 DreamWorks $22.99

The Man in the Iron Mask (8)

9 9 MGM $104.17

The Wedding Singer (10)

10 10 New Line $107.37

N=New

Week ended OCT. 11

This chart, tailored for the supermarket video market, is based on information taken from more than 1,000 supermarket rental locations serviced by Ingram Entertainment, La Vergne, Tenn.