""We are looking at the beginning of the end of the age of movies on physical media like DVD and Blu-ray," says Dan Cryan, a leading analyst at industry research specialists IHS. He's talking about a new report that shows a dramatic change in how Americans view films, and it's a change that is gradually expanding across the rest of the world.
The popularity of online film formats has been growing for some time, but this year it has seen a sudden spike. Part of this is due to a change in anti-piracy tactics by distributors, who have concentrated on making their films easier to access legally at the same time as lowering prices in line with market research. The other big change has come from retailers like Amazon, whose subscription services have encouraged customers to get into the habit of streaming film content.
IHS estimate that online film sales for 2012 will number around 3.4 billion in the US, compared with 2.4 billion for DVDs and blu-ray discs combined. But because of the lower price attached to streaming - approximately 11% of the price of a DVD - overall revenues for distributors will grow by only a small amount. In the long term, as physical formats decline further, there is a risk that revenues could fall, creating problems for the industry and thus for current models of film financing. Cryan, however, doesn't expect that we will see the back of DVDs any time soon, pointing out that "almost nine years after the launch of the iTunes Store, CDs are still a vital part of the music business."
