Video Rental Stores Becoming Obsolete

DVD rental kiosks such as Redbox and digital streaming services are accelerating the demise of the local video rental store.

January 24, 2012

NEW YORK - Video stores nationwide are shutting their doors, struggling to survive among the growth of video rental kiosks and online streaming services.

Marketing Daily reports that according to The NPD Group, consumer rentals of DVD and Blu-Ray movies dropped 11% last year compared to 2010, while those that were rented increasingly favored Redbox, whose market share rose 12% for the year.

"In most metro areas, [the video store is] on life support at best," said Russ Crupnick, senior vice president of industry analysis for NPD. "I think Blockbuster??s latest move to close a lot of stores really puts an end to the video store as we know it."

According to NPD, Redbox??s unit volume grew 29% last year while its share of DVD and Blu-Ray rentals rose from 25% in 2010 to 37% last year. During the same period, Blockbuster stores saw a 6%net rental share drop to 17%.

"Redbox is the one bright spot in growing both in types of volume," Crupnick said. "Their footprint is growing, and so consequently is their share."

Meanwhile, Netflix??s rental business remained flat but an impressive 30% of market share, with its digital movie rentals commanding a 55% market share in the fourth quarter last year.

"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," Crupnick said. "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."

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