Sea Change in Movie-Rental MarketJanuary 19, 2012

Sea Change in Movie-Rental Market

Brick-and-mortar retail stores continue to cede movie-rental market share, as kiosks and digital-streaming rentals become more accepted by consumers.

Market research company, The NPD Group reports the U.S. consumer rental of movies in DVD and Blu-ray Disc formats fell by 11 percent in 2011, versus 2010,

Nearly one in three paid movie rentals (31 percent)

now come from paid video-on-demand (VOD) options.


Netflix is the dominant provider of paid digital movie rentals, posting a 55% share in the fourth quarter of 2011 (though down from the company’s peak of 59% in Q2 and Q3 ‘11).

“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,” said Russ Crupnick, senior vice president, industry analysis for The NPD Group.


“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.”

The leaders in the physical-disc rentalsvportion of the home entertainment category continues to change.

- Redbox’s unit volume increased by 29%, with their share rising from 25% in 2010 to 37% in 2011.

- Blockbuster’s share fell 6 percentage points to 17% in 2011.

- Netflix’s share of DVD and Blu-ray rentals was flat for the year at 30% (with their Q4 ‘11 hitting two-year low of 25%)..

“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 Crupnick. “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 of the physical movie rental share drop is a net loss.”

Findings reported in this press release reflect movie rentals only, and do not include rentals of television shows or series; nor do they include free movies from over-the-top television (OTT) or cable providers. All findings are based on information compiled from 38,637 digital movie renters and 74,008 DVD/BD movie renters from NPD’s online consumer panel. The data has been weighted and projected to reflect the U.S. population (age 13 and older).



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