Peter Kafka

Recent Posts by Peter Kafka

Netflix Crushing the Digital Movie Competition

If you’re going to pay for a movie over the Web, you don’t have to use Netflix. But there’s a very good chance you’ll do just that: A 60 percent chance, says NPD.

The consumer tracking outfit says Reed Hastings’ company owns 61 percent of the market for digital movies, with Comcast running a distant second at eight percent. There’s a three-way tie for third between DirectTV, Time Warner Cable and Apple.

None of which should be terribly surprising: Netflix is in the midst of a go-go growth boom, and while not all of its 20 million subscribers are using the company’s Web video service, many of them are. And a third of its new customers are signing up for its Web-only option.

Meanwhile, Apple’s iTunes movie store, which sells and rents films on an a la carte basis, has yet to catch on as well as Steve Jobs would like. And if you’re going to rent a movie from the cable guys, it seems much more likely that you’ll rent a movie via cable, directly to your TV.

More surprising is NPD’s assertion that digital video “now makes up one quarter of all home video volume.” I’ve got some questions about that statistic: For instance does it include all video, or just movies? And all video, or just legally purchased stuff? Etc. I’ll report back if I can get more detail from the company.


Six Out Of 10 Digital Movies Are Streamed via Netflix

NPD’s VideoWatch Digital tracking service reveals that subscription streaming, digital movies purchased online, and Internet and cable video-on-demand (VOD) services are becoming a part of many Americans’ entertainment diets.

PORT WASHINGTON, NEW YORK, March 15, 2011 – According to a recent review of the home video market in the U.S. by The NPD Group, a leading market research company, Netflix’s share of digital movie units, downloaded or streamed, reached 61 percent between January 2011 and February 2011, followed by Comcast at 8 percent, and a three-way tie for third at 4 percent among DirecTV, Time Warner Cable, and Apple. Based on information from NPD’s new VideoWatch Digital tracking service, digital video now makes up one quarter of all home video volume.

“Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers,” said Russ Crupnick, entertainment industry analyst for NPD. “Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files.”

NPD also compared consumer-reported satisfaction with four modes of digital-video acquisition: electronic sell-through (EST), Internet VOD (iVOD), cable VOD, and subscription streaming. Consumers clearly recognize that EST services like iTunes have the most “current releases available,” while Netflix streaming gets credit from customers for providing the best “overall shopping experience” and “value for price paid.”

Data note: The information in this press release is from VideoWatch Digital, which is based on online surveys of U.S. consumers age 13 and older conducted between January and the third week of February 2011. The final reporting is based on 10,618 completed surveys.

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