On-Disc Media Sales Continue to Decline


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The age of streaming media is here. Now that content companies are finally offering movies and TV in a variety of consumer-friendly formats home entertainment purchases are on the rise once again.

Market research firm IHS today released a report showing that home entertainment media sales increased by 1% in 2013. This mild growth is similar to that seen in 2012, but is far greater than the decline the industry saw over the seven years before that. Home entertainment revenue last year was estimated by IHS to reach $18.3 billion, up from $17.6 billion in 2012.

It's clear exactly where this growth is coming from, and it's not in traditional physical media or cable TV. Sales of disc-based home entertainment media declined last year to $11.7 billion, down from $12.9 billion the year before. IHS estimates that pay TV revenue in 2013 grew by just 1%.

Meanwhile, internet home entertainment media sales and rentals increased by 39% and 40%, respectively. Internet streaming subscriptions are also growing at a rapid pace, with revenue up by 31% last year. The IHS report shows that digital home entertainment now accounts for over one-third of industry sales.

“While 2013 was another record year for the theatrical box office, that didn’t translate into an increase in disc sales and rentals, given the ticket returns and resulting video success of last year’s hits including The Avengers and The Hunger Games,” said Michael Arrington, senior analyst for U.S. video at IHS. “While many factors have contributed to the nearly decade-long fall in U.S. consumer video disc spending since the market peaked at $21.9 billion in 2004, one long-term issue is consumers’ rising interest in alternative diversions, including streaming digital video, video games, mobile devices and apps, and Internet offerings like YouTube.”

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