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The decline of OD rental

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Old 04-29-2012, 05:47 PM   #46
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As I stated, the OD rental market is in the midst of serious decline.

Numbers from the DEG:

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The disc rental business didn’t fare as well. Rentals at brick-and-mortar stores fell 39.4% to $305 million, while subscription disc rental – mostly Netflix – was down an estimated 48% to $348 million, DEG claims. Kiosk rental – mostly Redbox – rose an estimated 30.1% to $523 million.
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Old 04-29-2012, 07:11 PM   #47
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As I stated, the OD rental market is in the midst of serious decline.
Your inaccurate blanket statements are getting old. The accurate statement would be: The OD rental market is in serious decline for B & Ms and Netflix.
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Old 04-29-2012, 07:29 PM   #48
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Your inaccurate blanket statements are getting old. The accurate statement would be: The OD rental market is in serious decline for B & Ms and Netflix.
The accurate statement is that the OD rental market is in serious decline.

Despite kiosk gains, which are negatively cannibalizing from B&M - a market that had higher revenue and margins.


Simply because the data points out a fact you do not like does not make it inaccurate.
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Old 04-29-2012, 07:40 PM   #49
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Quote:
Originally Posted by PSound View Post
As I stated, the OD rental market is in the midst of serious decline.

Numbers from the DEG:
Well at least the OD sub decline was down only $50 from Q4 2011 to Q1 2012. It was reported to be down over $200 million from Q3 2011 to Q4 2011. So there appears to be some stabilization occurring.

Speaking of which, SVOD seems to have stabilized as well, up only 3.5% from last quarter. That's a far cry from up 545% from last year.
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Old 04-29-2012, 07:54 PM   #50
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To see just how bad the OD rental decline was in Q1:

Just looking at B&M and kiosks:

B&M Q1 2011 Revenue - $503 million
B&M Q1 2012 Revenue - $305 million

$198 million B&M decline in Q1!

Kiosk Q1 2011 Revenue - $401 million
Kiosk Q1 2012 Revenue - $523 million

$122 million increase in kiosk revenue in Q1.


So before even looking at the absolutely massive 48% decline in OD by mail rental revenue, the OD rental market is down $76 million in Q1 purely from B&M and kiosk combined.

http://degonline.org/pressreleases%5...011_REPORT.pdf
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Old 04-29-2012, 08:07 PM   #51
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Originally Posted by PSound View Post
The accurate statement is that the OD rental market is in serious decline.

Despite kiosk gains, which are negatively cannibalizing from B&M - a market that had higher revenue and margins.


Simply because the data points out a fact you do not like does not make it inaccurate.
Redbox is clearly taking from Netflix disc by mail rental as well, which you seem to want to ignore.
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Old 04-29-2012, 08:18 PM   #52
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Originally Posted by bruceames View Post
Well at least the OD sub decline was down only $50 from Q4 2011 to Q1 2012. It was reported to be down over $200 million from Q3 2011 to Q4 2011. So there appears to be some stabilization occurring.

Speaking of which, SVOD seems to have stabilized as well, up only 3.5% from last quarter. That's a far cry from up 545% from last year.
I don't think we have enough data yet to really signify overall trends with SVOD.


I don't even know what is being captured at this point. For example, if zero Prime revenue is being counted then it could cause anomalies later if Amazon SVOD streaming ever gets reported separately.

And if HBO Go is offered outside of an MSO, it will also cause a major jump in reported SVOD revenue.
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Old 04-29-2012, 09:04 PM   #53
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I don't think we have enough data yet to really signify overall trends with SVOD.


I don't even know what is being captured at this point. For example, if zero Prime revenue is being counted then it could cause anomalies later if Amazon SVOD streaming ever gets reported separately.

And if HBO Go is offered outside of an MSO, it will also cause a major jump in reported SVOD revenue.
Agreed. We only have three quarters of worthwhile data to go on. Not enough for a YoY yet.
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Old 04-29-2012, 09:38 PM   #54
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Amazon Prime streaming contribution to digital rental vs not counting it as its mostly for free shipping is another issue. Not all of the older Amazon Prime customers used the service, even while free but the Kindle Fire tablet switches that dynamic.

How the Amazon Prime $79 a year revenues are counted is an interesting problem as obviously most of that is for people spending for the free shipping of goods bought through the Amazon website for home delivery of physical goods. Its a free bonus to their core business of selling and delivering stuff to consusmers.

But if should have also surged as in 4Q 2011 (Nov 9 2011) the Kindle Fire with a free 30 day subscription to Amazon prime free shipping and free Amazon Prime SVOD was included.

So from November onward a lot more people were using Amazon Prime video streaming on Kindle Fire tablets and even if they like free Amazon Prime for easy free 2 day shipping they are also using it for more SVOD video streaming as well.

How you split that up and allocate to digital rental SVOD I don't have a clue. Its as tough as trying to imagine what part of Netflix combined disc by mail and free streaming plans in past years went to that category before Netflix split the plans last year.
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Last edited by Kosty; 04-29-2012 at 09:41 PM..
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Old 04-29-2012, 09:54 PM   #55
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Quote:
Originally Posted by PSound View Post
To see just how bad the OD rental decline was in Q1:

Just looking at B&M and kiosks:

B&M Q1 2011 Revenue - $503 million
B&M Q1 2012 Revenue - $305 million

$198 million B&M decline in Q1!

Kiosk Q1 2011 Revenue - $401 million
Kiosk Q1 2012 Revenue - $523 million

$122 million increase in kiosk revenue in Q1.


So before even looking at the absolutely massive 48% decline in OD by mail rental revenue, the OD rental market is down $76 million in Q1 purely from B&M and kiosk combined.

http://degonline.org/pressreleases%5...011_REPORT.pdf
It looks like you're right that OD rental is in an accelerated decline phase, even when ignoring that artificially low -48% SVOD YoY figure (which one should unless they're fishing for spin).
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