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Are DVD Sales Really behind the Decline in Video Rentals?
New survey results question rental industry assumptions
NEWTONVILLE, MA (August 23, 2004)—A new report from Lyra Research entitled Flicks for Hire: A Video-Rental Survey finds that people who own more DVDs also rent both more DVDs and more total videos (see figure). This finding appears inconsistent with the rental industry's prevailing notion that consumers are renting fewer videos as they shift toward buying more DVDs. The report, the latest in the DTV View series from Lyra Research, is based on a survey of video renters conducted in June and July 2004.
"We can construct obvious logical theories why consumers who own more DVDs would also rent more videos," comments Steve Hoffenberg, principal analyst for the DTV View report series and Lyra Research's director of electronic media research. "For example, the more people like to watch videos, the more likely they are to both own and rent them. But such theories don't jibe with a commonly espoused assumption in the video-rental industry that the dramatic growth in consumer purchases of prerecorded DVDs is the chief cause of this year's slump in video rentals."
Hoffenberg adds, "Our survey was not a longitudinal tracking study to determine if individual respondents changed their DVD rental activity as they purchased more DVDs. Therefore, we cannot state with certainty that DVD buying is not contributing to the decline in rentals. However, our findings call into question whether DVD buying is indeed the primary factor reducing video rentals, and they suggest a more complex relationship between rentals and purchases."
Flicks for Hire: A Video-Rental Survey is based on a survey of more than 1,000 video renters and includes a sample of more than 100 users of Internet/mail rental services such as Netflix. The report examines which consumer demographic and technographic groups rent videos most and least often, where and how they rent, what they like and dislike about the rental process, and how likely they are to use new video-rental methods. The report is the fourth in the new DTV View report series on the digital television market, published regularly by Lyra Research. To introduce the new DTV View report series to the industry, Lyra Research is offering the first report in the series, DVR Love: A Survey of Digital Video Recorder Users, published in May 2004, free to qualified industry executives at www.dtvview.com.
About Lyra Research
Founded in 1991, Lyra Research is recognized worldwide as a leading provider of market, product, and technology information and analysis focused on the imaging industries. Lyra Research provides targeted information to more than 2,000 clients in more than 40 countries. Lyra's researchers and analysts have solid professional industry experience and provide clients with decision-critical support and market intelligence. Lyra's portfolio of services includes leading industry newsletters, special market reports, advisory services, conferences, and custom consulting. With DTV View, Lyra is applying its research methodologies and publishing expertise to the digital television industry.
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