Pay TV Still Rules VOD ... for Now

According to the NPD Group, the current VOD market for paid movie rentals is ruled by pay-TV services, with revenues that reached $1.3 billion last year. The emerging Internet VOD (iVOD) movie market reached $204 million and is growing quickly, which may already be leading to consumers reducing their use of pay-TV VOD a la carte movie services. There were 4 million fewer pay-TV VOD users who paid additional fees to watch movies in August of 2011 compared to August 2010.According to information from NPD's VideoWatch VOD tracking service, 15% of U.S. consumers ages 13 and older used pay-TV VOD movie services from a cable, satellite, or fiber-optic provider in the 12 months ending August 2011, which translates to 40 million users. By contrast, iVOD -- which includes movie offerings from iTunes, Amazon, Vudu and others -- has already reached 7 million users. One out of every six (16%) paid VOD movie-rental transactions were attributed to iVOD in 2011.