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Online DVD subscription spending is projected to increase 41 percent to $1.9 billion in 2007, according to Adams Media Research report "Online DVD Subscription: Reinventing Video Rental."

"The five-year decline in the video rental market will finally end in 2007," said AMR Senior Analyst Eric Wiener, "due, in part, to an acceleration in the growth of online subscription rental fueled by consumer interest in Blockbuster's Total Access program."

Netflix leads in the online subscription rental business with 75 percent of the market at the end of 2006. Blockbuster's Total Access program is going strong and added 800,000 new subscribers in the first quarter of 2007, exceeding Netflix's quarterly growth for the first time. The two companies combined added a total of 1.3 million new subscribers in the first quarter.

Adams Media Research estimates that online subscription spending will increase by 68 percent between 2007 and 2011, reaching $3.2 billion, making up about 37.5 percent of the overall video rental market.

"Video rental is still the U.S. consumer's favorite way to see movies, with 2.5 billion rented in 2006," Adams noted, "and the online subscription model positions the overall rental business well for the coming showdown with electronic movie downloads from the Internet."