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Research: Disc Tops Digital for Movie Rentals — For Now

18 Oct, 2012 By: Erik Gruenwedel

More than a third of online consumers surveyed said they rented a movie disc in the past 30 days compared with 25% who streamed and 22% who purchased transactional video-on-demand, according to a new study.

While a majority of consumers still rent movies on DVD and Blu-ray Disc from kiosks and video stores, that practice is changing among younger people. Mintel Group Ltd., a multinational research firm, found that streaming movies is more popular than physical discs among 18- to 24-year-olds — underscoring that Madison Ave.’s coveted demographic favors the digital movie marketplace.

Just more than half (51%) of 18- to 24-year-olds have rented a movie or TV show in the past 30 days via a monthly subscription program versus only 31% of all age groups. In addition, 55% of the younger demo rented via a streaming service (45% via disc) compared with only 38% of all age groups.

According to Mintel, those who buy any type of digital movie are also more likely to purchase any type of physical movie and vice versa. Thus, the most common basis for selecting one or the other is based on price — approximately one-third of respondents say they will buy either format depending on which is cheaper.

In spite of aggressive expansion on the part of Amazon into digital media, and digital video in particular, Apple's iTunes is the clear leader in digital movie sales. Sixty percent of respondents who purchased a digital-store movie in the past 30 days, did so through iTunes, more than twice the share that did so at Amazon (25%) and three times as many as any other competitor.

Overall, digital downloads, subscription streaming and VOD sales of movies are expected to increase tenfold in the 10-year period 2007 to 2017. From 2007 to 2012, sales more than quadrupled from $1.3 billion to $5.5 billion.

"We live in a time of instant gratification and the idea of waiting for a movie to arrive in the mail or actually driving to a store to get one is an idea of the past," said Billy Hulkower, senior technology analyst at Mintel. "Increased acceptance of all intangible media, including music, photos, books and games, is a driver with consumers increasingly acclimated to the immediacy of all digital formats."


About the Author: Erik Gruenwedel

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