The year-end report from market research firm The NPD Group provides yet more evidence that the disc-rental business is in trouble. That shouldn’t bother Redbox yet: The firm’s kiosks accounted for 37% of all movie DVD and Blu-ray rentals, up from 25% in 2010. Netflix remained flat for the year at 30% — although its self-inflicted wounds (remember Qwikster?) were apparent in Q4 when it had just 25% of the disc rentals, a two-year low. The big loser was Blockbuster, which shuttered hundreds of stores as it retrenched from bankruptcy. Bricks-and-mortar stores, the field Blockbuster dominates, accounted for 17% of rentals, down from 23% in 2010. The silver lining is that many consumers now are paying to rent movies from VOD services: They accounted for 31% of all paid movie rentals last year. Netflix is the leader here but can take small comfort from the NPD tally: Its VOD market share dropped from 59% in Q2 and Q3 to 55% in Q4. “The movie-rental market is clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options,” says Russ Crupnick, SVP for Industry Analysis. “Even so renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S.”

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