Digital Entertainment Surges as Disc Rentals DeclineBy: Sean Patterson - January 9, 2014
Anecdotally it’s clear that streaming media is the future of content consumption. Netflix was a pioneer in this sense, co-opting its own DVD-by-mail business model with a streaming service several years before the technology was perfected. Most physical copies of movies now come with digital version unlock codes.
Now hard data has emerged showing that digital entertainment sales are growing while all types of disc-based media are seeing declining sales.
The Wall Street Journal today reported on data released by Digital Entertainment Group showing that digital movie sales increased to nearly $1.2 billion during 2013 – a 47% increase from digital sales in 2012. Subscription streaming service revenue also grew over 30% to hit $3.1 billion, while video-on-demand sales increased slightly to just over $2.1 billion.
At the same time, sales of DVDs and Blu-rays are dropping quickly. DVD and Blu-ray sales slipped 8% in 2013, though the category remains large with $7.78 billion in revenue last year. Disc subscription rental revenue dropped nearly 20% last year to only $1.02 billion and store DVD/Blu-ray rental revenue dropped 14% to just $1.04 billion. Even kiosk rental sales (such as those from Redbox) are dropping, with the category down 1% to $1.92 billion in 2013.
While these sales numbers are certainly a sign of the times, the Journal also sees them as the outcome of studios and other content providers pushing digital media more aggressively. The report cites the fact that digital versions of movies are now often released weeks before disc-based versions. Studio executives cited by the journal believe much of the sales increase comes from consumers who would have rented a movie, but instead opt for an early digital purchase.