| Consumers have a number of options when it | | | | utilizing online movie rental services was that the |
| comes to viewing movies at home. Two of the | | | | individual rented movies on the spur of the |
| most popular are renting movies at the local video | | | | moment and did not plan ahead. Certainly renting |
| store and renting movies via an online service. An | | | | movies online and receiving them through the mail |
| informal survey was recently conducted on a | | | | would not allow someone to decide at 6:00 p.m. |
| home electronics/entertainment site regarding the | | | | that they want to see The Queen and receive it |
| movie viewing habits of website visitors. The | | | | so that they can be viewing the movie by 8:00 |
| results pointed to some of the misconceptions | | | | p.m. However, the delay for receiving movies |
| that still exist about online rental of DVDs by | | | | selected through the mail is only 1 business day |
| consumers that have not yet tried the service. | | | | which would seem sufficient in most instances. |
| Participants in the survey were asked a number | | | | The future of DVD rental may be changing |
| of questions, including how often they watch | | | | however as Netflix announced in early 2007 that |
| movies at home, whether or not they rent | | | | customers would now have the option of |
| movies online, and if not, why. Nearly 28% of | | | | watching movies instantly via a streaming service |
| those responding indicated that they rent movies | | | | that is now available for some movies. The |
| online. Of the remainder, the most frequently | | | | service should be quicker than most download |
| cited reason for not using an online movie rental | | | | services as streaming allows viewing of the movie |
| service was concern which centered around the | | | | as it is streamed rather than waiting until |
| perception that online movie rental would be more | | | | download is complete. Although a full transition |
| expensive than the local video store. When looking | | | | from the current mail delivery system to a |
| at a couple of scenarios it becomes evident which | | | | download type of service will take time, it is clear |
| method tends to be more affordable. | | | | that immediacy will only continue to improve. It |
| For individuals who indicated that they watch only | | | | would seem that other online movie rental |
| 1 to 3 movies per month the savings from | | | | services would follow suit in coming years in order |
| renting online are small. Renting 2 movies per | | | | to compete. |
| month at the local video store would average | | | | Consumers who have not been initiated into the |
| around $7.40 whereas renting from Netflix for | | | | online movie rental world also may be unaware of |
| example, if they chose the plan that has a limit of | | | | other benefits/features of such services. |
| 2 movies per month, would run $5.99. After | | | | * Greater selection- A typical video store has |
| getting a video at the local store the user would | | | | 10,000 to 15,000 titles available whereas the |
| have overnight or perhaps one week to return | | | | Netflix online movie rental service has over |
| the movie but an online rental would allow them | | | | 65,000. This would seem to eliminate the problem |
| to keep the movie for an unlimited period of time. | | | | of consumers arriving at the store only to find |
| For those individuals who responded that they | | | | that there is nothing there that they really want |
| view 1-3 movies per week, the savings would be | | | | to see. |
| more significant. For instance, renting 8 movies | | | | * There are no fees related to the delivery and |
| per month would run around $29.55 at the local | | | | return of DVD's; and there is no traveling to and |
| store and as low as $14.99 online if they chose | | | | from the store as movies are delivered to their |
| the "2 out at a time" plan or $17.99 for the "3 out | | | | door or to their home via streaming. |
| at a time" plan. As viewing increases so does the | | | | * Movie selection is assisted by user reviews |
| likelihood of experiencing greater savings. | | | | through online programs like Netflix. |
| For those who responded that they view 4 | | | | * Trials of online movie rental services are |
| movies per week (averaged out to 16 per | | | | generally risk free as there are free trials available |
| month) the average cost at the local store would | | | | and no cancellation fees. |
| be $59.04 while online rental would be $23.99 | | | | * There are never any late fees nor restrictions |
| allowing the user "4 out at a time". Renting | | | | on how long a movie can be kept. |
| through a service like Netflix generally does not | | | | Misconceptions about online movie rental services |
| limit how many movies a person views but | | | | appear to limit the participation of a significant |
| rather, how many movies they can have out at | | | | number of consumers. Online movie rental |
| any given time. Therefore rentals are more or | | | | probably offers the services that most |
| less unlimited with many of the plans. | | | | consumers want, even if they don't know it yet. |
| The second most frequently cited reason for not | | | | |