Consumers Cautious of Online Video Rentals

A new report from Ireland's Research and Markets finds that only about 30 percent of broadband users express any degree of comfort with the idea of online video rental.

A new market analysis report from Ireland’s Research & Markets examines the video rental industry, and how traditional brick-and-mortar video rental businesses have been impacted by mail-order outfits like Netflix and the seemingly burgeoning arena of Internet-based video download services. The conclusion: most consumers alternate between services based on what’s most convenient, but only 30 percent of adult broadband users expressed any level of comfort with downloading movies via the Internet.

The survey found that among consumer who rented movies from a traditional video rental store, 15 percent also say they use a pay-per-view service, 14 percent said they’ve used a direct-mail service, and 12 percent have used a video-on-demand service. Research & Markets also concludes that video rental services should primarily target home televisions, rather than trying to offer content for PCs or mobile devices.

The report also finds that direct-mail services like Netflix haven’t so much expanded the overall market for video rental so much as they’ve taken market share away from brick-and-mortar retailers—a finding which no doubt comes as no surprise to chains like Blockbuster, which have been struggling to maintain their businesses. The report also finds that video store customers tend to be less tech-savvy than other video renters, which may mean the overall market for traditional store-based video rentals will continue to shrink as the population of technologically-hip consumer grows.