Kiosk DVD rentals outperform video stores for first time ever

Video stores continued to take a hit in 2010, as consumers rented more DVDs from kiosks like Redbox than from stores for the first time ever in 3Q2010.

Kiosks saw a 10 percent jump in market share to 31 percent in the quarter compared to a year ago, while subscriptions services like Netflix grew 2 percent and claimed a 41 percent share of the market, the largest piece of the pie. Brick and mortar video stores saw a 13 percent drop in share to 27 percent, said a report from NPD Group.

As recently as 2008, now-bankrupt Blockbuster had a 35 percent share of the market on its own.

"The rental landscape for DVDs and BDs continues to shift, and consumers are obviously responding positively to the perceived value and convenience of kiosks," said Russ Crupnick, entertainment industry analyst for NPD. "Traditional video retailers will no doubt experience even more competition in the coming year, as kiosks appear more frequently in grocery store chains, mass merchandisers, and quick-serve restaurants, and as competition intensifies from an assortment of on-demand rental offerings."

NPD, which currently doesn't track figures for streaming services or VOD offerings from pay-TV operators, says it plans to start doing so soon.

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