Nearly a third of US consumers now watch movies and other videos on Internet streaming services such as those offered by Netflix Inc. (NASDAQ: NFLX) and Amazon.com (NASDAQ: AMZN). About 55% of streaming video rentals in the fourth quarter were watched on Netflix, according to the latest report from NPD Group.
Rentals of physical discs have dropped by -11% in the US in 2011, and the leading provider of rentals is the ubiquitous Redbox vending machine from Coinstar Inc. (NASDAQ: CSTR). The Redbox’s share of rentals rose to 37% in 2011, up from 25% in 2010. Netflix’s disc rentals remained stable at 30%. Blockbuster stores, now owned by Dish Network Corp. (NASDAQ: DISH), saw disc rentals fall by -6% to 17% of the total.
An NPD executive noted a “sea change” in viewing habits:
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. 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.
Shares in Netflix are up more than 5% at $103.33 in a 52-week range of $62.37-$304.79. Coinstar shares are up nearly 2% at $47.61 in a 52-week range of $37.43-$60.71.
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