Video on demand stages a comeback

9 Jan, 2012 By: Stephanie Ricca

Annually in-room television provider LodgeNet releases its list of the top on-demand movies in the hospitality market. In 2011, 37 titles generated $1 million or more in sales revenue on LodgeNet TV systems--a company record. Read on to find out one reason behind that record.

But first, here's the list of 2011's top on-demand movies in the hospitality market:

1. Bridesmaids (Universal Pictures)
2. The Hangover Part II (Warner Bros.)
3. Limitless (Relativity Media)
4. Fast Five (Universal Pictures)
5. Little Fockers (Universal Pictures)
6. Just Go With It (Sony Pictures Entertainment)
7. The Lincoln Lawyer (Lionsgate)
8. No Strings Attached (Paramount Pictures)
9. Hall Pass (Warner Bros.)
10. Life As We Know It (Warner Bros.)

In-room video on demand services have been fighting an uphill battle the last few years, as guests increasingly demand bandwidth to plug in and play their own media devices, rather than pay for content.

By 2010, market researchers already were noting the decline in pay-per-view movie revenue at hotels. Even two years ago, PKF reported total movie rental revenue in hotels dropped 5.4 percent on a compound annual basis from 2000 to 2009.

However, video on demand providers are learning to adapt to the preferences of their fickle customers who live in a Netflix world. Over the summer LodgeNet dropped some movie rental prices with the goal of attracting more viewers willing to pay lower prices.

LodgeNet CEO Scott Peterson spoke with USA Today about the strategy then.

Yahoo! News contributor Jason Gallagher contends traditional video on demand providers, like LodgeNet, may have a window of opportunity to gain back customers, especially if their movie offerings are "priced competitively or better than Amazon on Demand or iTunes."