Can kiosks be stopped? Studios fighting popular choice

Posted in DVD, Netflix, Redbox, rentals by Diane on August 25, 2009

More good news/bad news depending which side of the Redbox fence you’re sitting on: Research outfit NPD Group projects that rental kiosks will command 30% of the market next year, a 58% increase over its share as of midyear 2009. As of midyear, kiosk commanded 19% market share compared to 45% for trad videostores including Blockbuster and 36% for subscription services such as Netflix.

Where will this projected gain come from? NPD doesn’t say but trad videostores would seem most vulnerable. “Consumers are obviously responding positively to the perceived value of $1 per day rentals, and they appreciate the convenience offered by video rental kiosks,” analyst Russ Crupnick noted.

Video Business outlines the diverging fortunes of Redbox and Blockbuster here.

The NPD Group: Video Rental Kiosks Receiving Increasing Consumer Attention in the Video Rental Marketplace

Video rental kiosks on track to make up nearly 30 percent of the U.S. video rental market in 2010

PORT WASHINGTON, NEW YORK, AUGUST 25, 2009 – According to The NPD Group, a leading market research company, video-rental kiosks are receiving increasing attention from consumers, which is leading to more competition for consumers among traditional video rental stores and subscription rental services. While traditional store rentals still account for the greatest share of video rental turns among U.S. consumers today, kiosk rentals are experiencing more growth than either subscription services or store rentals. Through the first half of 2009, the share of rental turns (i.e., the number of videos rented by consumers) reached 19 percent for video kiosks like Redbox, compared to 36 percent for Netflix and other subscription services, and 45 percent for Blockbuster and other traditional brick–and-mortar video stores.

According to NPD’s VideoWatch service, in the coming months both subscription services and traditional video retailers will experience even more competition from kiosks, which are becoming more ubiquitous in grocery stores, mass merchandisers, and quick-serve restaurants. Even so a primary consumer appeal for subscriptions and store rentals is their depth of title selection – a key benefit that might help mitigate the increased competition from kiosks, which offer a more limited list of video titles.

If current kiosk-category expansion plans are implemented, NPD anticipates that video rental kiosks will make up nearly 30 percent of video rentals in the U.S. next year. “Consumers are obviously responding positively to the perceived value of $1 per day rentals, and they appreciate the convenience offered by video rental kiosks,” said Russ Crupnick, vice president of industry analysis for NPD.

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