Even as more US consumers adopt subscription streaming from Netflix and other services, the majority of feature-length movies are still rented on physical discs., according to The NPD Group’s VideoWatch VOD report.
Rentals of physical DVDs and Blu-ray discs (BDs) from kiosks, brick-and-mortar retailers, and Netflix Movies by Mail accounted for 62% of movie rental orders during the first half of this year. Digital movie rentals, including subscription streaming, pay TV VOD, and Internet VOD, accounted for the other 38%.
NPD’s VideoWatch VOD report also revealed that overall movie rentals through all of these sources declined 10% since last year. Rentals of physical discs, while dominant, are becoming less so; in fact, year-over-year disc rentals from all sources declined by 17%, as digital movie rentals increased by 5%.
Within the physical disc market, kiosks continued to extend their lead, with rental orders growing 5% over last year. Kiosk rentals accounted for 45% of the physical market, as rentals from brick-and-mortar stores continued to fade. DVD and BD subscriptions also declined, due to Netflix’s focus on digital-video streaming.
Total digital-movie rental orders increased 5%; growth that was largely attributable to Netflix Watch Instantly, the flat-fee subscription movie and TV streaming service.
Although the vast majority (%) of Netflix rental activity was for TV shows, movie rental activity was still sufficiently robust to make it the leader in movie rentals for the digital segment (66%). Pay-TV VOD accounted for 28% of digital orders, while internet VOD (iVOD) accounted for 6%.
“Kiosk and subscription Internet streaming are generating strong user satisfaction ratings, including future rental intent, price, and value, which is reflected in market-share gains,” said Russ Crupnick, SVP of industry analysis for The NPD Group, in a statement.
“Netflx is frequently the most popular video application on connected devices, so an increase in households with Web-connected Blu-ray Disc players, tablets, and smart TVs will lead to still more video streaming activity.”
