Movie Audience Wants Online Movie Rental

Consumers have a number of options when it comes to viewing movies at home. Two of the most popular are renting movies at the local video store and renting movies via an online service. An informal survey was recently conducted on a home electronics/entertainment site regarding the movie viewing habits of website visitors. The results pointed to some of the misconceptions that still exist about online rental of DVDs by consumers that have not yet tried the service.

Participants in the survey were asked a number of questions, including how often they watch movies at home, whether or not they rent movies online, and if not, why. Nearly 28% of those responding indicated that they rent movies online. Of the remainder, the most frequently cited reason for not using an online movie rental service was concern which centered around the perception that online movie rental would be more expensive than the local video store. When looking at a couple of scenarios it becomes evident which method tends to be more affordable.

For individuals who indicated that they watch only 1 to 3 movies per month the savings from renting online are small. Renting 2 movies per month at the local video store would average around $7.40 whereas renting from Netflix for example, if they chose the plan that has a limit of 2 movies per month, would run $5.99. After getting a video at the local store the user would have overnight or perhaps one week to return the movie but an online rental would allow them to keep the movie for an unlimited period of time.

For those individuals who responded that they view 1-3 movies per week, the savings would be more significant. For instance, renting 8 movies per month would run around $29.55 at the local store and as low as $14.99 online if they chose the “2 out at a time” plan or $17.99 for the “3 out at a time” plan. As viewing increases so does the likelihood of experiencing greater savings.

For those who responded that they view 4 movies per week (averaged out to 16 per month) the average cost at the local store would be $59.04 while online rental would be $23.99 allowing the user “4 out at a time”. Renting through a service like Netflix generally does not limit how many movies a person views but rather, how many movies they can have out at any given time. Therefore rentals are more or less unlimited with many of the plans.

The second most frequently cited reason for not utilizing online movie rental services was that the individual rented movies on the spur of the moment and did not plan ahead. Certainly renting movies online and receiving them through the mail would not allow someone to decide at 6:00 p.m. that they want to see The Queen and receive it so that they can be viewing the movie by 8:00 p.m. However, the delay for receiving movies selected through the mail is only 1 business day which would seem sufficient in most instances.

The future of DVD rental may be changing however as Netflix announced in early 2007 that customers would now have the option of watching movies instantly via a streaming service that is now available for some movies. The service should be quicker than most download services as streaming allows viewing of the movie as it is streamed rather than waiting until download is complete. Although a full transition from the current mail delivery system to a download type of service will take time, it is clear that immediacy will only continue to improve. It would seem that other online movie rental services would follow suit in coming years in order to compete.

Consumers who have not been initiated into the online movie rental world also may be unaware of other benefits/features of such services.

* Greater selection- A typical video store has 10,000 to 15,000 titles available whereas the Netflix online movie rental service has over 80,000. This would seem to eliminate the problem of consumers arriving at the store only to find that there is nothing there that they really want to see.

* There are no fees related to the delivery and return of DVD’s; and there is no traveling to and from the store as movies are delivered to their door or to their home via streaming.

* Movie selection is assisted by user reviews through online programs like Netflix.

* Trials of online movie rental services are generally risk free as there are free trials available and no cancellation fees.

* There are never any late fees nor restrictions on how long a movie can be kept.

Misconceptions about online movie rental services appear to limit the participation of a significant number of consumers. Online movie rental probably offers the services that most consumers want, even if they don’t know it yet.