Services & Software

NPD: Cable dominates Web in VOD rentals

With the quality of Netflix's movie library in shabby shape, on-demand movie rentals could be an important category. So far, the cable and satellite providers are whipping Internet guys, says NPD.

Daniel Terdiman/CNET

Cable companies accounted for 48 percent of all on-demand movie rentals for the first half of the year, research firm NPD said in a press release Monday.

NPD said that the fastest growing segment in VOD are telcos, which grew 24 year-over-year. Telcos outpaced Internet video-on-demand rentals, which saw a 15 percent increase.

Paying an upfront fee for an individual movie rental is different from services like Netflix and Amazon's Prime service, which offers unlimited renting for a flat monthly price.

Grain of salt time: NPD notes that its numbers are strictly for VOD and did not include subscription services such as Netflix and Amazon Prime. Netflix has over 24 million domestic customers and is among the frontrunners in delivering movies.

Nonetheless here's why the VOD rental category might be important. Netflix isn't getting the same level of movies it once did. That means there's plenty of demand for these movies that Netflix can't satisfy.

For Internet distributors, who do rent on a VOD basis, so far they've struggled to compete with their cable and satellite rivals, according to NPD.

Of the total paid video rental transactions, Comcast accounted for 23 percent and is the sector's leader, NPD said. Satellite TV provider DirectTV came in second with 14 percent and Time Warner Cable was a distant third with 9 percent.

Apple's iTunes came in fourth with 8 percent and after that it was Verizon and Dish Network. NPD didn't event mention other Web distributors such as Vudu, or Google Play.

Correction at 7:22 a.m. PT October 1: This story erred in reporting which segment saw a 24 percent increase in VOD movie rentals for the first half of the year. The correct category was telcos.