Study: Subscription video rentals becoming more popular

As consumers continue to wholeheartedly embrace the digital age, video subscription services like Netflix and Hulu are becoming more popular. This was confirmed in a recent study by the NPD Group, which revealed that physical DVDs and Blu-ray rentals from brick-and-mortar stores are losing ground to subscription commerce companies.

The research found that traditional physical rentals from kiosks and by mail accounted for approximately 62 percent of orders during the first half of 2012. The remaining 32 percent, however, was attributed to digital subscription services like streaming, pay TV video on demand and internet VOD.

“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,” NPD Group industry analysis senior vice president Russ Crupnick said.

Furthermore, subscriptions on both the physical and digital ends are gaining more ground. The NPD Group reported that approximately 20 percent of all DVD and video rentals were made through subscriptions at physical stores, while another 25 percent were completed through subscription streaming services.

Netflix, in particular, continues to dominate the DVD and video rental market.

“Netflix 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,” Crupnick said.

A new subscription service by Coinstar and Verizon, dubbed Redbox Instant by Verizon, may make the streaming video market a little more competitive when it is unveiled sometime in the second half of 2012.

By leveraging an innovative subscription billing and management platform to boost performance, companies trying to survive the streaming video trend may be able to gain a competitive advantage over some of the larger service providers.

For more information on cloud-based subscription billing platforms: click here.

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The Forrester Wave: Subscription Billing Platforms, Q4 2015

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