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Digital movie downloads set to take over from slumping DVD sales

The home entertainment market has for many years been crucial to the success of Hollywood’s major studios, helping to bankroll its blockbusters and big-name stars. According to one industry executive, 2014 will be the year when digital movie downloads finally begin to make up for the downturn in the DVD market.

Speaking to the Financial Times, 20th Century Fox Home Entertainment President Mike Dunn said that 2014 will be the year that digital movie purchases make up for the drop in physical sales. This much needed cash boost comes at a time when many major studios are cutting back on the number of films in production and the amount spent on each one.

Over the past 12 months, we’ve seen Target and Comcast launch digital movie platforms, entering a market already straining under the weight of the various competing services. Meanwhile, DVD rental service BlockBuster was canned back in November as audiences turned to the likes of iTunes, Netflix, Google Play and Hulu for their movie fix.

One report by the Digital Entertainment Group suggests that digital movie purchases rose 50 percent in 2013, though the $1 billion spent on film downloads and streams is still a small fraction of total spending on home entertainment in the U.S.. “Home entertainment is so critical for Hollywood that if this space shows growth it changes everything,” said Dunn. “I think it will tip this year.”

The executive said that making digital films available to purchase before the release of DVDs and Blu-rays had helped to increase demand and profitability. This “early windowing” is becoming more and more common, with some releases even available to buy online on the same day as they hit theaters.