Consumer Movie Disc Rentals -11% In 2011 As Paid VOD Grows

The year end report from market research firm The NPD Group provides yet more evidence that the disc rental business is in trouble. That shouldn’t bother Redbox yet: The firm’s kiosks accounted for 37% of all movie DVD and Blu-ray rentals, up from 25% in 2010. Netflix remained flat for the year at 30% — although its self-inflicted wounds (remember Qwikster?) were apparent in Q4 when it had just 25% of the disc rentals, a two-year low.

The big loser was Blockbuster which shuttered hundreds of stores as it retrenched from bankruptcy. Bricks-and-mortar stores, the field Blockbuster dominates, accounted for 17% of rentals down from 23% in 2010. The silver lining is that many consumers now are paying to rent movies from VOD services: They accounted for 31% of all paid movie rentals last year. Netflix is the leader here, but can take small comfort from the NPD tally: Its VOD market share dropped from 59% in Q2 and Q3 to 55% in Q4. “

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,” says Russ Crupnick, SVP for Industry Analysis. “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.”