Streaming movies from vendors like Netflix and iTunes will advance by 135% this year to 3.4 billion sales, for revenues of $1.72 billion – far less than the expected $11.1 billion taken in from DVD and Blu-ray disc sales. Online movies will account for 57% of viewership in 2012, but only 12% of the spending.
IHS analyst Dan Cryan states, “the result would be a net decline in home entertainment revenue even as consumption reaches previously unattainable heights.” Basically, with certain low-cost “all-you-can-watch” services from vendors like Netflix, consumers are taking in huge amounts of content for cheap. Netflix streamed over 2 billion hours of video in Q4, 2011. Streaming movies accounted for 94% of online viewership in 2011, while actual digital purchases made up on 1.3%
As a response to this, movie studios try to keep newly released material away from online streaming vendors. Still, Hollywood endorses the new UltraViolet format, the cloud-based media locker. Wal-mart has also endorsed UltraViolet, and has allowed users to transfer DVDs they own to the cloud for $2 a pop.