When You Can’t Sell Movies, Rent Them Out.
We all know that video on demand is rising quickly in popularity, but what about selling digital downloads of movies and TV shows? Well, it seems like selling movies over the internet has a few bugs that need to be worked out before the idea fully takes off.
Richard Greenfield of BTIG Research stated last week that even though revenue is up 16% from last year, selling movies and TV shows electronically is not working out. Pricing is a huge factor – especially since that usage rights are limited, especially content from specific cable stations.
Greenfield is saying that while VOD and iVOD is expected to rise, “selling digital movies has been a failure. The studios are trying to force something to occur that makes no sense for the consumer,” said Greenfield.
Digital downloads were up 37% after the first three quarters last year, but only up 16% after the fourth thanks to very low numbers in the final quarter of 2010.
To put it in comparison – VOD finished up 21% ($1.8 billion), which to Greenfield, shows that while consumers will not pay to BUY movies digitally, they are still okay with renting films digitally.
“Rental has become so convenient there is simply no need to purchase content anymore,” he added. “It takes the same number of clicks to buy content as it does to rent it.”
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