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Are digital movie rentals over-hyped?


There has been a lot of talk over the past couple of years about how the evolving digital world is already impacting the traditional movie rental business. Talk of how traditional movie rental stores are soon dying out at the hands of their digital counterparts.

Yes, it is true that Australian consumers are becoming more and more in control of “what they want, when they want”, but just how well are these new providers of digital movie rentals really fulfilling those needs?

It is a fact that digital delivery methods are still in their infancy in Australia, but even in the more established US market legitimate digital consumption of home entertainment content is still less than 5% of the total rental market. Fine, that percentage is growing, but it is quite obviously still a long way from being the preferred viewing method by consumers.

How efficient are digital movie rentals?

The key difference that has been noticed, is that the current Australian digital players, apart from Apple iTunes and Google Movies, do not boast the range of titles that would be presented if a consumer were to walk into a movie rental store today.

They simply do not have enough choice to offer the customer! Take a look for example at June and July this year. There were 161 new release films released on DVD into the Australian market. Note that this number excludes re-released movies, TV on DVD, movie collections and sporting titles. Of these new releases, 55% were available to watch through Telstra’s BigPond, 9% through Quickflix and 17% through Foxtel’s On Demand service.

Therefore, there is no doubt that the bricks and mortar store offers a much bigger range than any online streaming service currently in the market. And, with the consumer being the driver for demand of content, the limited range offered by digital rental players highlights some inherent flaws in the advertised perception that digital on demand services are as content rich as they claim. Looks like someone’s selling hot air.

While the common perception is that you can get anything and everything via illegal means, almost one in three (30%) of the titles being released in August could not be found. With the combination of lack of range and the unavoidable fact that piracy is well, illegal; it is no surprise that many Australians are finding that the “free lunch” really is not worth the gamble on quality and range.

The facts are clear to see that whereas the market is evolving and more digital content providers enter the market, physical product is and will remain king for quite some time to come.

It is therefore no surprise that Australians are overwhelmingly still supporting and using their local movie rental store as a preferred option for home entertainment.

So, it seems that the digital perception is not always the physical reality!

Image by Hil