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How Cable Companies still Dominate Movie Rentals


According to The NPD Group, although viewing movies through new low-cost Internet video on demand (iVOD) subscription services is making significant inroads with a savvy group of informed Americans, legacy cable TV companies are still the first choice for on-demand per-use movie rentals.

Led by Comcast in the first half of 2012, 48 percent of all paid video-on-demand (VOD) movie rentals were generated from traditional cable TV service providers.

With a 24 percent rental-order growth rate year-over-year, telco VOD is the fastest growing segment of the VOD market, outpacing even the iVOD growth rate of 15 percent.

Note, the NPD research refers only to movie rentals that are paid for upon rental -- subscription video rentals and video purchases were not included in this market study.

"When it comes to paying for on-demand movies on an a-la-carte basis, cable companies are by far the primary conduit, due in large part to their widespread penetration and usage in Americans’ homes," said Russ Crupnick, senior vice president of industry analysis for The NPD Group.

Even as iVOD, and VOD from satellite-media companies and telcos grow in popularity, cable companies continue to dominate the VOD movie rental market -- at least for the time being.

According to the NPD VideoWatch VOD report, for the first half of 2012, paid VOD movie rentals from Comcast represented 23 percent of the VOD rental market, followed by DirectTV at 14 percent, and Time-Warner Cable at 9 percent.

The Apple iTunes video on-demand service comprised 8 percent of paid video rental transactions, followed by Verizon and Dish Network at 7 percent each.

AT&T received the best customer ratings across a number of criteria, including site organization, navigation and title availability.

Video consumer audience demographics for iVOD movie rentals skew toward tech-savvy early adopters -- primarily men (70 percent). In fact, 44 percent of iVOD movie rental orders were made by men aged 25 to 44, compared to only 21 percent of cable VOD rental orders.

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