Online Movies Set to Overtake DVDs and Blu-rays

Web-based movie download and rental services, coupled with tablets and connected TVs, have led to greater online movie consumptionThis year, for the first time, US consumers will pay more for online movies than they will for DVDs and Blu-ray discs. IHS Screen Digest, a media-focused research and consulting company, projects online video views and transactions in 2012 will outnumber views and transactions of DVDs and Blu-ray discs combined.

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According to Screen Digest’s analysis, US audience members consumed 1.4 billion units of online movies in 2011. That is expected to reach 3.4 billion units in 2012. Views of physical movie discs, including retail sales and rentals of VHS, DVD and Blu-ray discs, will drop from 2.6 billion units in 2011 to 2.4 billion units in 2012.

Screen Digest’s online movie category encompasses electronic sell-throughs, in which consumers purchase movies for download from providers like Apple’s iTunes; internet video on demand where consumers pay to stream a film from a service like Amazon Prime; or subscription on-demand services like Netflix Instant where consumers often pay a monthly fee for online streaming. Online movie viewership is likely on the rise due to providers like Amazon, Apple and Netflix refining their services, as well as the growing selection of online content.

Tablets are also likely contributors to online movie growth. According to comScore, almost half of US tablet owners viewed full-length movies or on-demand video or TV episodes on the tablet on at least a monthly basis.