Report Sees Continued Erosion in DVD Sales

SCOTTSDALE: Double-digit declines in annual retail sales of DVDs are expected for the next few years, reports In-Stat, as paid video downloads and streaming revenues rise from $2.3 billion in 2009 to $6.3 billion in 2014.

In that same period, revenues from DVD sales are expected to fall by $4.6 billion, the In-Stat report says, with consumption trends shifting towards, online à la carte rental of TV episodes, online subscription TV services and paid online video stores. “Video disc rentals will continue their significant decline,” said Keith Nissen, principal analyst. “Netflix is already shifting its focus to online streaming, and redbox is evaluating a similar strategy. The convenience and utility of the online offerings are simply too compelling. Online rentals permit the selection of any movie or TV program from the video-on-demand library. Ultimately, it will be impossible for physical disc kiosks to compete with the in-home or in-store download-to-rent business model."

The report also notes that U.S. TV download revenue will more than triple between 2010 and 2014, and online VOD subscription revenue is expected to approach $3.5 billion by 2014.