Movie studios are masters of "release windows" which means that they try to milk the most money from their movies in one venue before allowing it to move on to the next. For example, a movie will run in theaters before it is available for pay-per-view and so on. In that food chain, movies are not available for cable on-demand viewing until about a month after they come out on DVD.

This has meant that on-demand movies do not cannibalize DVD sales. According to Forrester Research, households where someone recently watched an on-demand movie bought only 1 percent fewer DVD's each year than they had before they discovered the cable service.

But the story was different for DVD rentals. Video-on-demand watchers said they rented about 11 percent fewer movies than before.