Online DVD rental market to rise 41% this year, study says

Spending on online rentals of DVDs will hit $1.9 billion this year, helping to reverse a five-year slide in overall DVD rentals, Adams Media Research says in a new report, “Online DVD Subscription: Reinventing Video Rental.”

Adams Media projects spending on subscriptions to online DVD rental services to increase by 68% between 2007 and 2011, rising to $3.2 billion, or about 37.5% of the total video rental market. It adds that online subscriptions should remain strong even as the video rental market begins to offer more video downloads over the Internet.

“Video rental is still the U.S. consumer’s favorite way to see movies, with 2.5 billion rented in 2006, and the online subscription model positions the overall rental business well for the coming showdown with electronic movie downloads from the Internet,” says Adams Media president Tom Adams.

“It’s a rare 20-year-old business that gets a chance to reinvent itself the way video rental has through online subscription services,” he adds, “but the appeal to the consumer of unlimited rentals with no late fees is now clear.”