Only 14% Use Online Devices For Rented Movies

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Although Internet-connected entertainment devices (televisions, tablets, gaming consoles, smartphones) are all the rage among consumers, people are still not renting movies to play on them.

According to new research from The NPD Group, only 5% of the 134 million consumers who own devices capable of playing rented, streamed movies (iVOD) have used them for those purposes. Even when it comes to devices whose sole purpose is streaming entertainment, only 14% have used them to rent movies.

“The various connected devices needed to enable iVOD are already found in enough households to allow this distribution channel to grow well beyond early adopters,” Russ Crupnick, senior vice president of industry analysis, tells Marketing Daily. “To move the needle forward, though, iVOD providers must now leverage their content selection and search advantages and perhaps take a page out of Netflix’s playbook by offering more free trials to introduce potential users to their services.”

The report, it should be noted, defines iVOD movie rentals as those that are rented from Apple iTunes, Microsoft Zune, Sony PlayStation Network, Amazon Instant Video, Vudu, Best Buy’s Cinema Now and Blockbuster.com. Netflix, which is the leader of streaming movies, was not included because NPD classifies it as a subscription streaming service, rather than iVOD.

Those subscription services, as well as cable and satellite services, may be a major reason why iVOD may be struggling to catch on. According to the NPD, 56% of those who rented iVOD movies are also Netflix subscribers and 43% also used their providers’ VOD service.

“[Consumers] get what Netflix or iTunes is all about, and same for Pay TV VOD. Most people are getting these devices and see a splash screen with Vudu or CinemaNow and don’t really understand what it is,” Crupnick says. “Add to that that Netflix is often the killer app for connected devices and you’ve got monumental consumer education and competitive challenges.”

Yet, there’s a glimmer of hope for these companies. Some of them, like iTunes and Amazon already have strong brand recognition among consumers. With a big part of the challenge among consumers “just getting someone to register a credit card for the first time,” the companies could also take a page out of Netflix’s playbook and offer more free trials and other tactics to increase sampling.

“We may have to sell this like a new detergent as unappealing as that might be to entertainment purists,” Crupnick says. “When I bought my DVD player decade ago it had a Netflix bumper sticker stuck to the top and a free trial offer. Why not do the same when I buy that Samsung Blu-Ray player or TV?”

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1 comment on "Only 14% Use Online Devices For Rented Movies".

1. Tracy Hill from T. Hill Group
   

   commented on: December 19, 2011 at 9:50 a.m.
   Believe it or not, we are actually smart enough to figure out what that little Amazon.com icon is on our OTTs and web-connected TVs. It's not that people don't get how to buy iVods, they simply don't want to buy them. Which is why the studios will be much better off working with Netflix than not. And isn't it kind of silly for networks to block their content from said devices in a system where advertising dollars are determined by the number of eyeballs a piece of content gets?

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