Wednesday, January 7, 2015

Digital Continues To Hurt DVD Sales, VOD Down Too

While digital media sales continue to grow, DVDs are not.  It seems that consumers are fully adopting digital sales and subscription media over ownership of DVDs and other physical media.  Not surprising as more televisions are internet ready, more computers have dropped the DVD slot, and consumers are enjoying easy access of content through subscription services like Netflix.  In fact, DVDs and blu-ray discs were down over 10% from last year.  That trend seems likely to continue.

It should be noted that when all the figures of digital and physical media are totaled up, "Total home-video spending was $17.8 billion, dropping 1.8 percent from 2013, according to the report in LA Biz.  This total decline may be partly due to a weak box office, according to the report, but other factors may also be a result.  Consumer spending in general and less dollars focused on entertainment verse other needs may also be to blame.  Like cord cutting and cord shaving, consumers may be using subscription services and digital to pay less but get more content. 

Another interesting note from the report, while consumers have pushed back on physical formats, they also pushed back on VOD.  Total sales fell 6.7% from last year.  Again cord cutting and cord shaving may be to blame with consumers preferring to watch on mobile devices and getting access to programming via You Tube, Netflix, Hulu, Amazon, and other OTT outlets.  Given the push of these subscription services, I would not be surprised to see VOD numbers to continue to drop in 2015.  Until cable operators create an alternative online platform that is added value to its wired approach and touts a true TV Everywhere mentality, VOD will only continue to find a backseat to digital. 

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