Watching movies, reading reviews and downloading movies on the Internet are fast becoming a craze in the US and other developed countries. The recent years have seen a consistent surge in downloading movies and buying of DVDs over the Internet. According to NPD there has been a 39% increase in subscription rentals of TV content and a 255% increase in TV-title digital video downloads between August 2005 and August 2006.
The $8 billion DVD rental business is also moving online, and approximately 20% of the DVD rental spending has already moved online. NPD also reveals that people who purchased TV titles on DVD were twice as likely as the average consumer to also download digital video content. For the year to date ending in August 2006, iTunes was the most popular paid video download site with 67% of video downloads. MovieFlix followed with 19% and CinemaNow was third with 9%.
The fact that online movie is fast catching on and that media companies are looking at this space can be derived from the following:
· In July 2007, Microsoft added about 35 Disney movies to its Xbox 360’s download service, Xbox Live. Xbox now has 28 TV and movie studios on Xbox Live.
· Warner Bros., Lionsgate, Paramount and Home Entertainment are the other studios, which have already started contributing HD titles to the fast-growing platform.
· In the first six months of its launch, Netflix’s subscribers have watched 5 million movies and TV episodes on their PCs. Through its “instant watching” service Netflix offers over 2,000 titles and plans to ramp it up to 5,000 titles by the end of the year.
· iTunes’ movie service was launched in September 2006, with only Disney on board. It has also signed on Paramount Pictures and Lionsgate. Apple’s iTunes has sold more than 2 million movies till April 2007. It recently signed on MGM.
· A comScore study conducted in early June 2007 shows that traffic increased to several movie-related sites over the month with the onset of the summer movie season. The tickets category gained 12% visitors versus April 2007 to 40.8 million, buoyed by strong growth at MovieTickets.com (up 55% to 5 million visitors) and Fandango.com (up 50% to 7 million visitors).
· The retail movies category experienced a 7-percent increase to 27.6 million visitors, while movie social networking site like Flixster.com saw traffic surge 65 percent to 4.5 million visitors. 46.1% of Internet users get their movie information from Internet sites.
· There are rumors of Apple launching an Online Movie Rental Service for as little as $2.99.