The NPD Group: Sea Change in Movie-Rental Market Benefits Redbox and Netflix Watch Instantly in 2011

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

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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

Port Washington, N.Y. (PRWEB) January 19, 2012

According to The NPD Group, a leading market research company, U.S. consumer rental of movies in DVD and Blu-ray Disc formats fell by 11 percent in 2011, versus the prior year, and the landscape of retailers has shifted dramatically. 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 like Blockbuster, whose share fell 6 percentage points to 17 percent in 2011. Netflix’ share of DVD and Blu-ray rentals was flat for the year at 30 percent; however, in the fourth quarter (Q4) 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 vice president, 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 of the physical movie rental share drop is a net loss.”

In fact, according to NPD’s VideoWatch Digital tracking service, 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 percent share in the fourth quarter of 2011, though Netflix’s share is down somewhat from the company’s peak of 59 percent in Q2 and Q3 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.”

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).

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, entertainment, fashion, food, home and office, sports, technology, toys, video games, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us Twitter at https://twitter.com/npdgroup.

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