According to IHS Screen Digest, consumers will watch more movies on the internet than via DVD for the first time in 2012, while spending far less on the content.

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.