Will internet kill the video store?

The movie rental business is under threat from faster broadband speeds that allow consumers to download films without leaving home.

Australian economists predict the movie rental industry in their country will lose up to $20 million this year - a drop of 3.7 per cent.

United Video general manager Lindsay Hall believes New Zealand will see a similar trend, but is adamant it doesn't signal the death of the video store.

Hall says revenue at United Video - which has about 100 stores nationwide - has been down for the past couple of years after a decade of growth, but the fall slowed in 2009.

"There will be a downturn ... and we will lose stores as we have done over the years but certainly United Video is not predicting any major changes in the industry - it's full steam ahead."

The number of video rental businesses in New Zealand has been dropping steadily, from 515 in 2006 to 482 last year.

Statistics New Zealand figures also reveal the number of people working in the industry fell from a peak of 2950 to 2350 over the same period.

Hall attributes much of the downturn to illegal downloading and hopes anti-piracy legislation due to be passed this year will have a big impact.

"There are forces out there that work against us. But if the legislation goes through, 60 per cent of illegal downloading should stop and that will generate some business back to us."

Hall has no issue with legal downloading or online subscription services like Fatso, which he sees as healthy competition rather than a threat.

There are no figures for the number of movies downloaded by New Zealanders, but a 2006 report by Statistics NZ found about 19 per cent of internet users downloaded or watched movies online.

Video Ezy Quay St manager Kat Patrick says downloading hadn't affected business too much because our broadband speeds are relatively poor.

"I think a lot of people don't have the patience to sit and wait. The technology in this country is piffle really."

Patrick doesn't believe video stores are on the way out and says there will always be a place for "collectors' stores" like hers, which appeal to the discerning viewer because they stock films that are not widely available.

"People still like toddling down and having a look - mum and dad can go to one side and the kids go to their area," says Patrick.

"People like having a read and choosing their own movies."