Are people who buy more DVDs to blame for the decline in video rentals? No, if a recent report by Lyra Research is on the money.
Lyra finds that people who own more DVDs also rent more DVDs. Actually, they rent more total videos, including DVDs and VHS tapes. The finding, which comes out of a survey in June and July of more than 1,000 video renters and a sample of more than 100 users of Internet/mail rental services such as Netflix, questions the rental industry’s assumption that people are renting fewer videos as they buy more DVDs, Lyra says.
“The more people like to watch videos, the more likely they are to both own and rent them,” says Steve Hoffenberg, Lyra’s director of electronic media research. “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.”
If Lyra’s finding is correct, there must be other reasons for the rental decline — and actually, the decline must be larger than the gain in rentals as a result of more DVD purchases, so that the outcome is a net loss. Do you have any observations on this?