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Media

DVD/Blu-ray Rentals Fall, Netflix Leads Streaming Market (NFLX, AMZN, CSTR, DISH)

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By Paul Ausick Updated Published
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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.

Paul Ausick

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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