Everyone was focused on the fact that consumers still buy plenty of DVDs and Blu-ray discs when the NPD Group published its 2012 Home Video Data report this week. It’s true: 61 percent of all U.S.-based transactional home video spending goes towards physical media, compared to 64 percent in 2011. But the real surprise to me was to see how much digital media Microsoft is moving these days.
Microsoft made a significant showing in the area of internet VOD, which is industry slang for those 24 or 48 hour video rentals you can get from iTunes, Vudu and others. That segment currently accounts for just 12 percent of total video-on-demand revenue, with 72 percent of the money coming from rentals through pay TV operators. But it’s an interesting segment, in part because it’s not dominated by just one or two players.
Apple’s iTunes does have a strong lead with 45 percent of all internet VOD revenue, according to NPD, but there’s a fierce competition going on for second place: Amazon Instant Video generated 18 percent of the industry’s revenue in this segment in 2012, followed by Walmart’s Vudu with 15 percent and Xbox video with 14 percent.