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Streaming Movies to Overtake Discs, But At What Cost?
IHS Screen Digest is forecasting that online streaming is going to beat out Blu-rays and DVDs for total viewers in 2012, but supply a lot less revenue.
Time to pick up a brand-new set-top box. For the first time in human history, Blu-ray discs and DVDs are about to bow to a new king of the living room: Streaming movies.
In a note that’s sure to send services like Netflix and Amazon Prime’s Instant Videos reaching for the champagne — as each plots new ways to overtake the other — movie-watchers are expected to view more than 3.4 billion films online this year. That’s legal movies, we should note, not pirated rips or YouTube clips. And there’s something else special about that number: It’s more than double the 1.4 billion online movies viewed last year, according to a new report from IHS Screen Digest.
In contrast, the total number of movie buffs checking out films on physical media — specifically, Blu-rays and DVDs — is expected to drop from last year’s 2.6 billion to just around 2.4 billion.
“We are looking at the beginning of the end of the age of movies on physical media like DVD and Blu-ray,” said Dan Cryan, IHS senior principal analyst, in the statement. “But the transition is likely to take time: almost nine years after the launch of the iTunes Store, CDs are still a vital part of the music business.”
But just because people are watching more doesn’t mean that they’ll be paying more — and, conversely, making the studios or streaming services that much more money. IHS Screen Digest’s report notes that online movie viewers are only expected to spend around $1.72 billion doing so. Physical sales of DVDs and Blu-ray discs are expected to hit $11.1 billion.
Why the disparity? In a word, convenience: Services like Netflix, Amazon Prime Instant Video, Hulu, and others account for a significant portion of the online video marketplace. But with 94 percent of users paying for unlimited streaming services versus only 1.3 percent paying for single copies of digital movies, streaming services cut into the total. Viewers are buying once (or monthly) and streaming much, as opposed to buying more individual digital copies of movies than physical discs.
While it might be too late to stanch the flood of users to online streaming services, Hollywood studios aren’t making it easy for fans to stream the latest titles into their home. And viewers can expect Hollywood to entrench with the premiere of its Ultraviolet platform — a means to give users an easier way to mash their offline movie archive with cloud-hosted digital copies of their favorite flicks. Wal-Mart, for example, will allow users to buy cloud access rights to older films for anywhere from $2 to $5 per title.
By David Murphy, PCMag