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NPD: Late 2012 Box Office Fuels Q1 Rental Surge

29 Jul, 2013 By: Erik Gruenwedel

Transactional VOD now matches store-based move rentals

A strong box office in late 2012 drove a 10% uptick in movie rentals in the first quarter of this year, led by Oscar winner Argo, Ted and Skyfall, among others, according to new data from The NPD Group.

The increase represents a turnaround from the 12% decline in movie rentals in the 2012 calendar year. In the addition, the shift from by-mail rental and video stores continues, with most rental transactions occurring via video-on-demand and kiosks.

The NPD data — gleaned from a survey of 75,000 consumers in the first quarter — does not include subscription video-on-demand services such as Netflix, other free or paid subscription, nor does it include movies downloaded as part of a subscription from cable companies and other MSOs.

“Just five years ago nearly 90% of the rentals in the U.S. were from stores and disc-by-mail subscriptions,” Russ Crupnick, SVP of industry analysis at NPD, said in a statement. “Clearly, the landscape has radically changed.”

Indeed, kiosks, primarily from Redbox, remain the most popular source of movie rentals, accounting for 38% of movie units rented, up one share point from the same period in 2012.

Rentals from brick-and-mortar stores continue to lose momentum, due to increasing rental alternatives and store closings, declining one point year-over-year. DVD and Blu-ray movie rentals from subscription-by-mail services posted a market-share decline of four share points, as more Netflix subs shifted from discs to streaming.

That said, the by-mail subscription model continues to represent a large percentage of the rental landscape, including more than 7.5 million subscribers at Netflix through the second quarter.

Meanwhile, steady growth for pay-TV VOD rentals from cable, telco and satellite providers increased four points versus a year ago; pay-TV VOD rentals now match the once-dominant store rental category, in terms of the number of units rented.

“Considering the 2012 performance, it is heartening to see [rental] numbers bouncing back this year,” Crupnick said. “It seems so obvious, but the trends provide more evidence that a strong slate of movies not only drive box office at the theaters, but also rentals later on.”

Finally, NPD reported that about one in five consumer respondents said they watched a movie that was included with their pay-TV subscription, and an equal number watched a movie using a SVOD service such as Netflix during the past three months.

“Despite the growing popularity of subscription streaming options, consumers remain strongly interested in transactional rentals, whether discs from kiosks or individual rentals from their pay-TV provider,” Crupnick said. 


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