Movie Rentals On Physical Disc Still Lead Industry

DVD and Blu-Ray Rentals Still Dominate Streaming and Video-On-Demand

DVD and Blu-Ray rentals may be receiving heavy competition from Netflix, Hulu, Vudu and other on-demand and streaming providers but they are still dominating the rental market. A recent NPD Group report found that 62 percent of all movie rentals in the US are still supplied by discs rented from brick-and-mortar shops, kiosks (Red Box) and mail-order services (Netflix and Blockbuster).

The biggest gain appears to be at kiosk locations where movies typically cost less than $1.50 per night. Kiosk’s now make up 45 percent of the physical-media rental market, up by five percent since the groups last study of the disc vs. online rental market.

Physical disk rentals witnessed a 17 percent drop since last year while on-demand rentals now account for 38 percent of the overall movie rental market after rising by five percent. The biggest gain in the movie rental market comes in large part because of Netflix’s push towards its Watch Instantly program which accounts for two-thirds of the on-demand streaming market.

The remainder of the rental industry is centered around Pay TV video-on demand services and Internet video-on demand which account for 28 percent of the overall business.

The biggest plus for kiosk and subscription internet streaming customers appears to be the strong user satisfaction ratings they are receiving thanks to ease of use.

In some cases DVD and Blu-Ray physical disc rentals have been getting a big push from movie studios, for example Warner Bros. doubled the delay time required for low cost rental and streaming services to start offering cheap rental copies.