NPD: Rental Discs Still Preferred Over Digital8 Aug, 2012 By: Erik Gruenwedel
Rentals of DVDs and Blu-ray Discs from kiosks, brick-and-mortar retailers and Netflix accounted for 62% of movie rental orders during the first half of this year, compared with 38% for digital movie rentals such subscription video-on-demand streaming and transactional VOD on premium TV channels and the Internet, according to new data from The NPD Group.
Within the physical market, kiosks continued to extend their lead, with rentals growing 5% over last year. Kiosks accounted for 45% of the physical market, as rentals from brick-and-mortar stores continued to fade. DVD and BD by-mail subscriptions also declined as Netflix continues focus on streaming instead of discs.
Digital rentals increased 5% in the first half of the year due largely to Netflix. Although the majority (80%) of Netflix rentals are for TV shows, movies account for 66% of digital rentals. Transactional VOD on cable, satellite TV and telecommunications operators accounted for 28% of digital orders, while transactional VOD on the Internet (iVOD) accounted for 6%.
“Kiosk and subscription Internet streaming are generating strong user-satisfaction ratings, including future rental intent, price and value, which is reflected in market-share gains,” said Russ Crupnick, SVP of industry analysis for The NPD Group. “Netflix is frequently the most popular video application on connected devices, so an increase in households with Web-connected Blu-ray Disc players, tablets and smart TVs will lead to still more video streaming activity.”