Online Rental Subs Double in Size, NPD Study Finds22 Feb, 2005 By: Erik Gruenwedel
Buoyed by 76 percent subscriber growth and aggressive online strategies, respectively, Netflix and Blockbuster.com helped to nearly double subscription services' fourth-quarter share of the total rental market to 15 percent, according to data from The NPD Group.
In DVD units, online rental volume rose 87 percent.
Separately, conventional brick-and-mortar video rentals fell 6 percent during the same period.
Driven by a higher-educated consumer with a proportionally larger disposable income, Port Washington, N.Y.-based NPD Group said Netflix leads the online subscription market with 85 percent, down from 97 percent in the same period last year — with nascent Blockbuster's nascent service representing 11 percent.
“The competition will no doubt become fiercer as the business model matures, as broadband becomes even more ubiquitous and as these companies expand their customer base beyond the current demographic set,” said Russ Crupnick, president of The NPD Group's music and movie division. “The ‘value' components of subscription pricing, selection, ease of search and customer service will remain the key selection criteria when consumers choose a subscription service.”