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One of Hollywood’s worst nightmares is coming true: consumers are preferring to rent and not own in the digital sphere, just like in the physical world. iSuppli’s Screen Digest estimates that online movie rentals wil increase more than 120% by 2012, while online movie purchases will increase around 44%.

The disparity will get even larger by 2015, predicts the report. These numbers, if they come to pass, will surely infuriate studio executives, who simply cannot seem to accept the fact that the majority of consumers no longer feel the need to own content.

What do you think it will take for Hollywood to get the “we just want to rent” message from their customers, Insiders? Hollywood’s tactic of strongly encouraging ownership hasn’t worked when it comes to DVDs—will the online story be any different?
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(via GigaOM)

15 Responses to “Report: Consumers Prefer to Rent, Not Buy, Online Movies”

  1. Visitor [Join Now]
    Wesley [visitor]

    IF you only “own” a digital DRMed copy, you essentially are renting.

  2. Visitor [Join Now]
    JBG [visitor]

    I hadn’t rented for a while (had not seen any new movies in months) and I was quite surprised to see the recent trend of making the “rental versions” super annoying: tons of “previews” and other junk, warning messages (“go buy the real thing”) and no special features! I think if they keep pushing, people will either stop watching movies or stop paying for it…

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      I throw it in the player well before I intend to watch. Sounds like a new business model could emerge….renting store bought videos.

      • Member [Join Now]

        I thought I was the only one who does that. As soon as I get home I put it in the DVD Player and buy they time I’m ready to watch it it’s right at the Play que. I hate those DVDs that don’t let you skip the previews!

    • Visitor [Join Now]
      Brian [visitor]

      I have to agree with JBG – being forced to sit through commercials (trailers, warnings, etc) and then finding out that I just rented a stripped-down, movie only DVD actually sours my mood going into the movie.

  3. Member [Join Now]

    They will never get it because selling generates much more profit than renting.

  4. Member [Join Now]

    I’m not suprised. DVDs are expensive and bootlegging is cheaper.

  5. Member [Join Now]

    Here’s the rub with digital content. It’s not typically secure. Look at the systems and you’ll see why people are hesitant.

    1- With Amazon streaming they reserve the right to blackout purchases at will.
    2- With Amazon unbox you have a limited number of downloads.
    3- with Sony’s PSN you have 1 download and that dies with the hard drive typically, not the system. On PS3’s at least even a system restore wipes you VOD titles FOREVER.

    It’s just not safe to buy digital movies right now until they come up with a solution to this.

  6. Visitor [Join Now]
    Talk About Everything [visitor]

    Excellent blog here! Also your site loads up very fast! What web host are you using? Can I get your affiliate link to your host? I wish my site loaded up as quickly as yours lol

  7. Visitor [Join Now]
    UBM [visitor]

    With two blockbuster stores closing in my area, I went in to see if
    “good deals” could be had, and if customers were actually buying movies.

    On a Wed after work, the store was practically empty, and content was
    there to be had, but at $7 to $11 a movie.

    If people aren’t rushing into buy movies when a Name Brand store closes,
    why do the studios think we would rush to buy at the retail level?
    I asked myself.

    The models of business are changing, and eventually to recapture
    sell through, Studios will have to change. They went to the Two disc/Combo
    pack $25 way of thinking to try and increase sales, and that hasn’t worked.

    Now $1 rental is the norm. Time for $3 to buy Single Disc releases to
    become the norm…

    • Member [Join Now]

      The problem with the 2-disc combo pack is that they are repackaging old movies. Most of these that I would want I already have on DVD or in some cases still on VHS.

  8. Visitor [Join Now]
    Video Store Owner [visitor]

    Disc sells are definitely regional. I live in Midwest/South area. I sell PV movies very well from $4.99-$14.99. Urban areas have more people interested in digital viewing. Rural areas will buy physical media for a long time to come.

  9. Member [Join Now]

    I like UBM’s post… if $1 rentals are the norm, why not $3 single disc releases? On a related note, recently I watched a documentary called I Need That Record! and it was stated that the actual cost of producing a cd is somewhere around $1 (the interviewee even wobbled a bit on it costing THAT much). DVD’s are very similar in nature so they can’t cost all that much more. It’s greed and short-sightedness on the studios part. “Why won’t these $!$&$ consumers buy Open Season 3 for the usual $19.99?!?” Uh, because without having seen it, I already know it’s crap. My daughter will be lucky IF we rent this particular turd. Just lower the prices already and things will work out.

  10. Visitor [Join Now]
    Jo Anne [visitor]

    I rent or stream the movie first. If I absolutely love it and must own it, I wait for a sale or buy used. Why get stuck with media that will soon be outdated–i.e. picture disk, Beta, VHS. Tired of updating my library. So NO, don’t buy any more. Sorry, studios.