PORTLAND, Ore. (TheStreet) -- The demise of one-time video rental titan Blockbuster finally puts that chain's long struggle with an evolving marketplace to rest, but it doesn't answer one question: Who's going to rent everyone their DVDs?
Admittedly, it's not great out there for the last DVD renters. Since 1999, the number of video stores in the U.S. has dropped from 28,000 to just 6,122 in last year before the Blockbuster closings, according to the Entertainment Merchants Association. Contrary to what the self-inflicted tragedy of Blockbuster may lead consumers to believe, however, its death isn't the end of DVD rental. While Blockbuster made up a large portion of that particular industry, market research firm IBISWorld notes it's still a $4 billion market that still has a core of demand. That core has shrunk nearly 14% since 2008 -- thanks largely to Blockbuster's troubles -- but video-on-demand services from Comcast (CMCSA), Time Warner Cable (TWC), DirecTV (DTV), Dish Network (DISH) and on-demand streaming services from Amazon (AMZN), Apple (AAPL) iTunes and Wal-Mart's (WMT) Vudu haven't killed it yet.
Supply just might. According to Home Media Magazine, the 7.12 million DVDs sold this year made up 83% of all disc sales through October. Unfortunately, sales of those discs have plummeted more than 23% since last year despite fetching an $11 average price that's 7% lower than it was in 2012. Don't expect Blu-ray discs to come charging to the rescue, either. Instead of becoming the new standard, their share of the market hovers around 17% as sales drop 26.5% year over year. The movie industry seems content to make Blu-ray discs and upmarket niche item, as their average price has risen 2.6% within the past year to $20.54 -- or nearly double that of a DVD.
The fact is that studios really don't want to have to sell or even rent physical copies of movies anymore. They cost money to make, to package, to ship and to take back when viewers don't want millions of copies of a film they didn't exactly flock to when it was in theaters. Still, they'll package digital copies and Ultraviolet versions in with purchases just to get everybody nice and acclimated while arranging early releases for "Digital HD" versions of films and television shows to get fans to pay a premium for content without the packaging or ownership.But there's still a corner of the population that not only likes the physical copies, but likes renting them. There are still certain titles that haven't made the switch to digital downloads or streaming and there are customers who prefer getting a DVD on their own schedule rather than waiting for a streaming service to get a particular title. Those folks still have a bunch of options, but even they may not be around for long. We present the following five alternatives for DVD rental and wish disc loyalists the best of luck with keeping them.
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