Boom Times Continue For Video Chains Top 10 American Chains Added More Than 2,100 Outlets In ‘96

North America’s top 10 video chains added 2,121 outlets last year to give them more than 8,700 stores, reflecting the trend toward consolidation and the industry’s booming growth, an industry tracker has reported.

Video Store Magazine’s survey showed that all but one of the 10 largest chains added stores last year. Blockbuster maintained its dominance by opening 932 new outlets and Hollywood Video boosted its store count from 305 to 851.

“These numbers show that banks continue to back the video-store industry’s expansion efforts,” said Tom Adams, head of Adams Media Research of Carmel, Calif. “The theory that technology was going to make video stores obsolete refuses to come true.”

Adams said the growth among the leading chains underscores the consolidation among what has been a diffuse rental market. Overall, there are 28,000 outlets in the United States and Canada specializing in video sales and rentals and another 22,000 retail locations with some form of video.

Six of the 10 largest chains - Blockbuster, Hollywood Video, Movie Gallery, West Coast Entertainment, Video Update and Moovies - are part of publicly held companies, making it easier to obtain funds for more stores. Investors have not been enthused about the prospects for the stocks, however, and Blockbuster’s parent, Viacom, recently said it was scaling back the number of store openings this year to 600 from 800.

“I’d say that banks have been a lot happier with the chains than the stockholders,” Adams said.

Blockbuster’s $2.83 billion in revenues represented 18 percent of the $15.75 billion that North American consumers spent on video last year. Suncoast, which sells videos, had a 9.5 percent share with $1.49 billion.