Slowly changing consumer preferences have decreased the demand for goods, and data in FRED show this trend. Today, we explore how a change in consumer preferences and internet-based technology have affected the economic activity of video rental stores.

The FRED graph above shows Bureau of Labor Statistics data on the number of persons employed in video tape and disc rental establishments between 1987 and 2022. These data are divided by the number of persons employed in all types of consumer goods rental, multiplied by 100 to show it as a percent.

Video rental employment peaked in 1990 at 59% of all rental employment. That has steadily declined, and the latest data at the time of this writing puts that employment share at less than 3%. Let’s break it down.

Between 1987 and 2022, overall employment in rental establishments (excluding video rental) actually increased. So while consumer preferences for renting goods didn’t wane, demand for physical video rentals did. Video rental stores closed and their employment shrank as video streaming over the internet became a convenient alternative to a trip to the video store. It also eliminated late-return rental fees!

In “Video Killed the Radio Star,” The Buggles lamented that “we can’t rewind, we’ve gone too far… Put the blame on VCR.” That was 1979, a signal moment for video surpassing radio. But their lyrics may also apply to some big changes today: “They took the credit for your second symphony, rewritten by machine and new technology, and now I understand the problems you can see.”

How this graph was created: Search FRED for and select “Employment for Real Estate and Rental and Leasing: Video Tape and Disc Rental (NAICS 532282) in the United States.” From the “Edit Graph” panel, use the “Edit Line” tab to customize the data by searching for and adding “Employment for Real Estate and Rental and Leasing: Consumer Goods Rental (NAICS 5322) in the United States.” Last, type the formula (a/b)*100 and click “Apply.”

Note: This change in consumer preferences has led to a change in the name of the price index data series tracking spending on video-related recreation: In 2023, that series was renamed “Cable, satellite, and live streaming television service.”

Suggested by Diego Mendez-Carbajo.