More than 75% of all transactional video-on-demand (VoD) movies were rented via cable and satellite TV services in 2012, capturing a large majority share of the $1.3 billion dollar market, according to a new report from The NPD Group.
Telcos’ share of the VoD movie rental market increased last year, however, with telecom operators earning more than twice the amount of movie-rental revenue per subscriber, according an NPD press release.
Cable TV operators continue to dominate the $1.3 billion multi-channel video programming distributor (MVPD) transactional VoD movie market, capturing a 56% market share. Satellite TV operators followed with a 27% market share, while telecom TV operators ranked third with an 18% share of the market.
The VoD movie rental market share and revenues of telco TV operators, including Verizon FiOS and AT&T U-verse, rose in 2012. They gained four percentage points in market share last year, all at the expense of cable operators, whose overall market share declined 4%, according to NPD’s, “2012 VideoWatch VOD Report.” Satellite TV operators’ VoD transactional movie rental market share increased 1%.
NPD noted that these statistics include only movies “for which a separate additional per-movie-rental fee is charged, and not, for example, movies downloaded as part of a pay-TV subscription.”
Telecom TV operators generate nearly twice as much revenue per subscriber from VoD movie rentals than do cable TV operators, though the latter “enjoy a tremendous lead in the overall number of subscribers.” NPD estimates that telecom TV service providers earned an average $25.29 per VoD movie rental subscriber in 2012 as compared to $13.83 per cable service subscriber. Corresponding revenue for satellite service providers DirecTV and DISH Network amounted to $10.33, according to NPD.
“Verizon FiOS and AT&T U-verse still considerably lag cable operators in the number of service subscribers; however they are actually growing their share of the MVPD VOD movie rental market,” NPD senior vice president for industry analysis Russ Crupnick commented. “Telecom operators are leading their competitors when it comes to earning additional revenue from VOD movie rentals.”