Video Streaming Surpasses DVD/Blu-Ray Sales For The First Time

As further evidence that home entertainment consumers are shifting to various digital formats, a new report from Digital Entertainment Group shows video streaming subscription revenues surpassed DVD/Blu-ray sales in the United States for the first time in 2016.

U.S. consumers spent $6.23 billion on subscriptions to services such as Netflix, Inc. NFLX (up 23 percent from 2015), while DVD and Blu-ray sales dropped 9.5 percent to $5.49 billion.

Significance Of The Numbers

This data bodes well for internet video streaming companies such as Netflix, Hulu and Amazon.com, Inc. AMZN Prime. For context, Netflix added 7 million subscribers in its fourth quarter, finished 2016 with 93.8 million users and generated $8.3 billion in global streaming revenue.

Home Entertainment

“Looking at the home entertainment market as a whole, it is clear that the future of video distribution is digital,” data journalist Felix Richter wrote on Statista.

The report showed consumer spending on streaming subscriptions, video-on-demand and electronic sell-through increased in 2016, while all physical formats such as sell-through and rental suffered double-digit declines.

Richter believes digital business models now account for 56 percent of home entertainment spending and could soon outpace box office earnings to become the largest source of income for the entertainment industry.