Years from now, DVD and Blu-ray will occupy the near-forgotten nostalgia realms that formats like laserdisk occupy now. The only question is when? According to new research by IHS Screen Digest, 2012 could mark the beginning of streaming movie consumption overtaking their physical counterparts.
The US’ consumption of legal, paid movies is predicted to reach 3.4 billion views/transactions this year, which would be 1 billion units more than what is expected of physical video. The physical video formats include DVD, Blu-ray as well as VHS. Compared to 2011, online video consumption’s annual growth is 135 percent from 1.4 billion, and is expected to similar growth in the near future.
Though the online trend will finally dominate, senior IHS analyst Dan Cryan points out that, this is only a sign that the age of the physical format is at an end, “the transition is likely to take time: almost nine years after the launch of the iTunes Store, CDs are still a vital part of the music business.”
Amazon Prime, Hulu and of course Netflix have been integral to the online consuming shift. 2011 subscriptions for these types of services accounted for 94 percent of US paid movie consumption. Dan goes on to say that 2012 is the nail in the , “ the growth in online consumption is part of a broader trend has seen the total number of movies consumed from services that are traditionally considered ‘home entertainment’ grow by 40 percent between 2007 and 2011.”
Still, in 2012 there’s far more money to be made from the physical sales of movies, and Cryan predicts that won’t change unto 2016. This year, online viewing will capture $1.7 billion of this years movie revenue, compared to $11.1 billion that will be made through the physical format. By 2016, physical video will still have 75 percent of revenue, and online will have 17 percent—pay-TV will make up the remaining portion.