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Survey: 73% of Consumers Never Rent a Movie From Their Pay-TV Service

11 Mar, 2014 By: Erik Gruenwedel

Those who do rent from 1-3 titles every month

Studios are pushing electronic sellthrough of movies, and for good reason. Consumers aren’t rushing to rent movies from their pay-TV service — a trend that has held steady for years, according to a new survey from Digitalsmiths, which is owned by TiVo.

Nearly 73% of 3,140 of consumer respondents (18+ years of age) surveyed in North America in the fourth quarter last year said they have never rented a movie from their cable, satellite or telecommunications provider. Meanwhile, 12.5% said they rent one movie a month; 8.4% rent less than one, and 6.1% said they rent more than two titles.

Indeed, transactional VOD revenue increased less than 2.5% to $551 million in the fourth quarter, according to DEG: The Digital Entertainment Group.

At the height of packaged-media sellthrough, studios — spearheaded by Warner Bros. — began offering transactional VOD access to new releases day-and-date with their packaged-media launch.

“It is a safe assumption that there has not been significant growth in VOD rentals. Pay-TV providers have invested heavily in their VOD efforts in recent years with little evidence of revenue growth,” Digitalsmiths said in their Q4 Digital Trends report.

On the bright side, more than 48% of respondents said it is easier to find a title to rent on their pay-TV operator’s platform. More than 24% said it is not easy to find a title they want to rent.

Digitalsmiths said more than 45% of respondents are using a subscription streaming service such as Hulu or Netflix, which is slightly down from the third quarter. More than 57% are spending between $6 and $11 per month on these services. Netflix is the market leader (39%), with Amazon Prime Instant Video (11.6%) and Hulu (7.7%) being a distant second and third, respectively.

For the first time, Redbox Instant generated 2.6% market penetration, followed by Blockbuster On Demand at 1.6%.

Respondents cited convenience (59.2%), cheaper price (50.1%), ability to watch complete seasons of select TV shows (38.5%), superior selection (35.6%), search functionality (29.6%) and access via portable devices (21.4%) for using SVOD or iVOD services.

Another 29% of respondents said they use rental services such as Redbox kiosks (17.3%), Amazon Instant Video (8.5%) or iTunes (6.4%), spending between $3 and $11 a month on these services. Others include YouTube (Google Play) at 1.5%, Vudu (1.4%), and CinemaNow at 0.7%.



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