Rental Discs Still Preferred Over Digital

[Smokey]

Rentals of DVDs and Blu-ray Discs from kiosks, brick-and-mortar retailers and Netflix accounted for 62% of movie rental orders during the first half of this year, compared with 38% for digital movie rentals such as subscription video-on-demand streaming and transactional VOD on premium TV channels and the Internet, according to new data from The NPD Group.

Within the physical market, kiosks continued to extend their lead which account for 45% of the physical market, as rentals from brick-and-mortar stores and Netflix continued to fade.

Although the majority (80%) of Netflix rentals are for TV shows, movies account for 66% of digital rentals. While VOD on cable, satellite TV and telecommunications operators accounted for 28% of digital orders.

NPD: Rental Discs Still Preferred Over Digital | Home Media Magazine (http://www.homemediamagazine.com/industry-news/npd-rental-discs-still-preferred-over-digital-28013)

[Feanor]

Rentals of DVDs and Blu-ray Discs from kiosks, brick-and-mortar retailers and Netflix accounted for 62% of movie rental orders during the first half of this year, compared with 38% for digital movie rentals such as subscription video-on-demand streaming and transactional VOD on premium TV channels and the Internet, according to new data from The NPD Group.

Within the physical market, kiosks continued to extend their lead which account for 45% of the physical market, as rentals from brick-and-mortar stores and Netflix continued to fade.

Although the majority (80%) of Netflix rentals are for TV shows, movies account for 66% of digital rentals. While VOD on cable, satellite TV and telecommunications operators accounted for 28% of digital orders.

NPD: Rental Discs Still Preferred Over Digital | Home Media Magazine (http://www.homemediamagazine.com/industry-news/npd-rental-discs-still-preferred-over-digital-28013)
I'm not sure what to make of all this, or where exactly I fit in the picture.

I have Netflix, i.e. the online service, and I also rent physical discs from Zip.ca. The problem with the former is that the selection is a bit limited, (I'm told less so in the USA). The problem with the latter is I can't control which disc from my priority list they send me unless I pay quite a lot more per disc.

I can't imagine getting my discs from a self-serve kiosk -- they would rarely have what I want since I watch very few 'B' movies or 1-2 year old blockbusters.

[E-Stat]

The problem with the former is that the selection is a bit limited, (I'm told less so in the USA).
Ditto. I also have Netflix (disc and streaming) and am in the states and find the choices are indeed limited.

I would stream everything if possible.

[Sir Terrence the Terrible]

I am not surprised by this, I think this is why everyone got so pissed at Netflix for the price hike. The bottom line is their streaming catalog is pretty sorry(even though I love and learned much from their documentaries), and was really used to enhance the disc, not replace it. By decoupling the two, Netflix decreased the value of both, and it hurt them badly.

Netflix should wise up and re-couple the two back together. Their business would explode if they did.

[Woochifer]

I am not surprised by this, I think this is why everyone got so pissed at Netflix for the price hike. The bottom line is their streaming catalog is pretty sorry(even though I love and learned much from their documentaries), and was really used to enhance the disc, not replace it. By decoupling the two, Netflix decreased the value of both, and it hurt them badly.

Netflix should wise up and re-couple the two back together. Their business would explode if they did.

The bottomline here is that the content costs for Netflix and other streaming providers have gone through the roof. Even though they held the line on their streaming fees, in reality Netflix implemented a price hike by shifting the cost burden over to their disc-by-mail subscribers. Obviously, they botched it badly.

Unlike Amazon or Apple, Netflix has no retail component to subsidize their streaming product. With their costs far outstripping their subscription growth, their only way of subsidizing the streaming fees, was to split off the disc-by-mail service, which has not seen any real cost increases.

Netflix pissed off their subscribers because they were just flatout dishonest about what they were doing. I think consumers understand when costs go up, and have to get passed on in some way. But, Netflix basically gave preferential treatment to their streaming-only subscribers, and screwed over the disc subscribers that essentially built the company. In reality, it was a fee hike and a big one, but Netflix kept couching it in idiotic marketspeak euphemisms.

In hindsight, Netflix could have simply gone to tiered pricing. It was the simple choice, and analysts everywhere were predicting that Netflix had no choice but to go in that direction. Tiered pricing could entail something like splitting their streaming library into premium and non-premium offerings. Lower the price on a non-premium tier, and go with a higher price on the premium tier, while adding some incentives for the premium subscriptions like earlier access to new releases or exclusive content.

Yeah, some subscribers might get pissed off because they have to pay more, but if a company asks consumers to pay more, then should at least get more. Netflix basically asked people to pay 60% more for the same product, or even an inferior one, since they have lost content from some studios in the meantime. Netflix basically got too wrapped up in the tech press hype, and believed that they were smarter than everybody. How else would anyone have come up with a headscratcher like Qwikster?

The big problem with streaming right now is that every provider has massive gaps in their streaming offerings. By combining streaming and discs under a single subscription, Netflix subscribers could simply stream what they wanted, and if a title wasn't available, they could get it on disc. It worked very well. If Netflix recombined their services right now, I think they created too much ill will to just go back and pretend that 2011 never happened. They need to come up with a compelling product that will get subscribers excited again, and who knows what form that would take.

[Woochifer]

Rentals of DVDs and Blu-ray Discs from kiosks, brick-and-mortar retailers and Netflix accounted for 62% of movie rental orders during the first half of this year, compared with 38% for digital movie rentals such as subscription video-on-demand streaming and transactional VOD on premium TV channels and the Internet, according to new data from The NPD Group.

I think that reflects the simple reality that physical discs still dominate new releases. The content that goes over to streaming services is not what people want to watch. And transactional VOD is generally more expensive than a kiosk or B&M rental, and not necessarily convenient if the TV is not close to the internet connection.

[Smokey]

I can't imagine getting my discs from a self-serve kiosk -- they would rarely have what I want since I watch very few 'B' movies or 1-2 year old blockbusters.

I think the main reason self serve kiosk such as RedBox still dominate physical rental business might be because of its convenient than selection. Redbox have kiosk set up in front of large grocery stores in our town, so you can go grocery shopping and rent a movie at same time :)


I think that reflects the simple reality that physical discs still dominate new releases. The content that goes over to streaming services is not what people want to watch. And transactional VOD is generally more expensive than a kiosk or B&M rental, and not necessarily convenient if the TV is not close to the internet connection.

Not to mention that disc still offer the best picture and sound quality.