U.S. consumer rental of movies in DVD and Blu-ray Disc formats fell by 11 percent in 2011 compared with the prior year, while consumers tapping VOD options account for a third of all movie rentals, according to new data from The NPD Group.
The leader in physical-disc rentals was Redbox, whose unit volume increased by 29 percent year over year. As a result, Redbox’s share of DVD and Blu-ray movie rentals rose from 25 percent in 2010 to 37 percent in 2011.
NPD’s VideoWatch consumer tracker indicates that much of the share gains came from traditional brick-and-mortar retailers such as Blockbuster, whose share fell 6 percentage points to 17 percent in 2011. Netflix’s share of DVD and Blu-ray rentals was flat for the year at 30 percent; however, in the fourth quarter of 2011 the company reached a two-year low of 25 percent.
“There’s no doubt that Redbox has been the largest beneficiary of the collapsing brick-and-mortar store rental business, especially with ongoing Blockbuster store closings and the fact that there are also fewer independent stores than the prior year,” said Russ Crupnick, senior VP, industry analysis for The NPD Group.
“The Netflix share erosion may have resulted from their recent well-publicized challenges with pricing, and from their now-defunct Quikster experiment; however, they are in the process of shifting customers to their Watch Instantly option, so not all the physical movie rental share drop is a net loss.”
According to NPD’s VideoWatch Digital tracking service, nearly one in three paid movie rentals (31 percent) now come from paid VOD options. Netflix is the dominant provider of paid digital movie rentals, posting a 55 percent share in the fourth quarter of 2011, though Netflix’s share is down somewhat from its peak of 59 percent in the second and third quarters of 2011.
“The movie-rental market is clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options,” Crupnick said. “Even so, renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S.”
Future US's leading brands bring the most important, up-to-date information right to your inbox
Thank you for signing up to TV Technology. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.