U.S.

Movie, TV, & Video Game Rental Market (2006-2009)

Consumer Movie Rental

Market Revenue ($

million)

2006 2007 2008 2009

In-store Rentals $7,030 $6,215 $5,674 $5,118

Vending Machine Rentals 79 198 486 917

By Mail Rentals 1,291 1,797 1,949 2,114

VOD (cable, digital, & 993 1,077 1,365 1,684

subscription)

Between 2006 and 2009, the film rental market underwent a major shift. The in-store

rental market declined by nearly $2 million, while vending machine rentals increased tenfold and

by-mail rentals nearly doubled. However, VOD services through cable, digital, and subscription

also saw major increases. All of these changes meant companies like Blockbuster and Movie

Gallery had to either reorganize and make a complete business model shift- or face bankruptcy.

Meanwhile, the increases in by-mail rentals and VOD subscription, two services that Netflix

offered, meant that the number of Netflix subscribers more than doubled in that same time frame.

Purchase decisions from customers were focused on convenient access, price, variety of DVD

offerings, ease of return/return fees. Therefore, the key success factors within the U.S. DVD

rental industry were quickly becoming: