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Despite growth of streaming, most movies are still rented on discs

In the US, rentals of DVDs and Blu-ray discs 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%.

The NPD Group'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 (80%) 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, senior vice president of industry analysis for The NPD Group. "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."

The NPD Group's report is based on approximately 21,752 completed responses from US consumers.

Story filed 16.08.12

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