The movie industry is dynamic and has changed quite a lot recently. There was a time when the VHS industry raked in millions of dollars worldwide for movie companies. Then of course the show-stopping arrival of the DVD blew that out the water. Since entering the market in 1998, DVD distribution has been a profitable secondary channel for a lot of movie houses.
DVD sales have essentially allowed movies to have staying power as revenue generators for studios.
Movies on DVD were able to earn considerably more following theatrical releases, in the past. These days, that profit-making ability has been eroded by digital download consumer trends.
Even though DVD/Blu-ray distribution is still a multi-billion dollar business in the US alone, dwindling sales back up predictions that the DVD could be obsolete in 20 years.
Just to give an idea of how much the industry has transformed, back in 2000, about four years before the peak of DVD sales, movie giant Blockbuster declined several offers to purchase Netflix for a mere $50 million. In 2010, Blockbuster declared bankruptcy.
What are the trends looking like?
Movie audiences are increasingly falling out of love with physical film.
Consumers are also beginning to show a market preference for renting over owning.
Media companies fear that transactional online movie spending will not reach levels of physical spend.
Due to the proliferation of mobile devices, movies are becoming available for download first, then on DVD. Movies on DVD are fast becoming an after-thought for many consumers, with streaming sites like Netflix and Hulu finding increasing popularity.
The industry has been able to put a hold on movies on DVD releases to protect a three-month theatre window.
According to Forbes: “Disruptive trends in distribution of motion pictures suggest that DVDs (and Blu-rays) could become increasingly irrelevant.”