Posted Mon Mar 25, 2013 at 09:00 AM PDT by Brian Hoss
Video rental stores expected to nab a $1 billion share.
With digital rental services like Netflix and Amazon Prime competing to dominate digital video rentals, physical rentals are often overlooked when discussing the industry. There remain 1,500 video rental stores in the US, and that is before accounting for Redbox kiosks and disc by mail services.
These numbers come as part of an analyst opinion presented in Home Media Magazine that stresses the billions of dollars to be made by catering those who desire physical disc rental. Eric World of B. Riley Caris, a notable investment research business, "We continue to believe there is a large group of consumers that prefer and will continue to prefer renting DVDs or Blu-ray Discs for a number of understandable reasons: the large cost differential between DVDs and VOD, a lack of appropriate broadband access or a desire for the better quality and enhanced content of Blu-ray vs. downloads (i.e., alternative endings, additional features, etc.)"
At no point in the article is the category of discs that have been stripped of special features by the studios or discs that held back from rental by studio lockout addressed.
Naturally, where physical video rental is seeing expansion is primarily at Redbox, which generated $1.9 billion in 2012, and Wold expects will grow in rental activity annually by 5 percent. Wold also sees Redbox's focus on movies over TV a legitimate strategy to successfully differentiate its offerings from Netflix. Cutting into Netflix's 8 million disc subscribers is one area where Wold sees Redbox continuing its success. "We believe the ability to get same-day discs at the kiosk (vs. waiting a day for Netflix delivery), along with the addition of unlimited streaming content could prove to be a motivating factor to get Netflix subscribers to cancel."
Source: Home Media Magazine
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