NPD Group Finds More Rental Kiosks Being Used Compared To In-Store

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News Posted: Thu, Jan 20 2011 6:37 PM
Have you been out to a DVD rental kiosk lately? What about a movie rental store? Opened your mailbox only to find a Netflix envelope? We're guessing that you may have utilized Netflix or Redbox lately, but when's the last time you actually drove out to a movie rental store to find a flick? It's happening less and less overall, and now there are figures to prove it.

NPD Group's VideoWatch service has found that for the first time, the share of DVDs and Blu-ray Discs (BDs) rented from Redbox and other standalone kiosks overtook the share of retail store rentals in the U.S. Netflix and other subscription services comprised 41 percent of video rental turns in the third quarter of 2010, followed by kiosk rentals at 31 percent, and in-store rentals at 27 percent. The share of videos rented from kiosks increased 10 percentage points since the previous year’s third quarter, subscription rental share rose 2 points, and in-store rental share declined by 13 points.

Those numbers are very telling. Blockbuster recently filed for bankruptcy, and we have to believe that other movie rental stores aren't far behind. It's just too easy to get movies these days via the mail, through a streaming set-top box or at a Redbox machine when you're already out at the store. And face it: easy wins!

For the First Time, a Larger Share of DVDs and Blu-ray Discs Rented From Kiosks Than From Retail Stores

Consumer research from The NPD Group shows a year-over-year 10 percentage point gain in the share of videos rented from kiosks during the third quarter of 2010, as the percentage of videos rented from video stores declined by 13 percentage points and subscription rental share increased just 2 points.

PORT WASHINGTON, NEW YORK, January 17, 2011 – Recent research by The NPD Group, a leading market research company, reveals that for the first time the share of DVDs and Blu-ray Discs (BDs) rented from Redbox and other standalone kiosks overtook the share of retail store rentals in the U.S. last year. According to NPD’s VideoWatch service, Netflix and other subscription services comprised 41 percent of video rental turns in the third quarter of 2010, followed by kiosk rentals at 31 percent, and in-store rentals at 27 percent. The share of videos rented from kiosks increased 10 percentage points since the previous year’s third quarter, subscription rental share rose 2 points, and in-store rental share declined by 13 points.

“The rental landscape for DVDs and BDs continues to shift, and consumers are obviously responding positively to the perceived value and convenience of kiosks,” said Russ Crupnick, entertainment industry analyst for NPD. “Traditional video retailers will no doubt experience even more competition in the coming year, as kiosks appear more frequently in grocery store chains, mass merchandisers, and quick-serve restaurants, and as competition intensifies from an assortment of on-demand rental offerings.”

Data note: The information in this press release is from NPD’s Weekly VideoWatch tracking of U.S. consumers, age 13 and older, who reported on their purchases and rentals of DVD and BD titles.

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, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us on Twitter: @npdgroup.
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You know, I've still never used a Redbox (or simular service) to this day. Of course, I've had a Netflix account for over 3 years and before that I was in and out of Iraq non-stop for 4 years.

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RMedley replied on Fri, Jan 21 2011 11:25 AM

Me either Infinityze. We do however make good usage of On demand services, and have done so for several years now. We used to buy DVD's pretty regularly, and have quite a few. The only ones used anymore on any normal basis are the ones for my four year old (DISNEY, Barby, My Little Pony, etc etc). As we as a race have wider available broadband options, as well as the general availability of Technology today I think largely it is going to more and more be a dieing thing in the future as the need for Hard DVD's will be less and less over time.

If you think about all the things that will effect it becomes quite relevant that change is only hastening over time. If no one buys DVD's the department will disappear in stores, which has quantitative results in the end, such as the stores not needing personnel for the department, the shipping companies not having that product to ship, the locations need no cash pick up,maintenance or cleaning. There are more thing it will affect, but just as general examples.

I personally in ten years would be surprised to see any retail locations period like block buster or in store rental area's at all. I doubt we will even see these redbox or other kiosk's either. The faster technology moves the more widespread impact it has, the more change we see. If you look back in history to see the change from agricultural to industrial age, and modernize some of the concept changes it is readily apparent.

I am not saying there are any issues with change really, I am just saying it will look different next year, and vastly so I think in two. Many of these things that are relative to one business practice will just move on to every other one relative to it as well. I personally think that largely in the entertainment industry a lot will change because technology in general means less individually involved, and as specialized area's of any industry disappear/change income shifts or disappears as well.

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CDeeter replied on Fri, Jan 21 2011 4:32 PM

Hmm sounds like it won't be long before DVD's are gone. As it is there are no longer any movie rental stores left in my town, and only a few kiosks within driving distance.

Something to think about:

If streaming and on demand become our only choices does that mean a win for DRM, RIAA, and the movie industry?

Can you record streaming media on a DVR?

Will this mean an end to having our own collection of music and media, and instead have to rely on the cloud?

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