Despite launching a new physical format in UHD Blu-ray, sales of physical discs continued to plummet in the US last year – even more than in 2016. Subscription streaming on the other hand expanded 30%, according to Variety.
Decline is accelerating
Physical video formats have for decades been a major revenue driver for Hollywood studios but consumers are moving on to more convenient ways of watching movies.
Last year, revenue from disc sales was down 14% to $4.7 billion dollars, following a 10% decline in 2016, according to trade organization Digital Entertainment Group (DEG). Blu-ray has never managed to replace DVD and despite UHD Blu-ray’s early success it brought in a meager $147 million dollars of revenue last year.
Movie theatres also saw fewer moviegoers. The domestic box office in the US dropped 2% to $11.1 billion.
Subscription services save the day
Consumers are instead flocking to streaming services, more specifically subscription based streaming services such as Amazon and Netflix. These types of services typically license catalog titles from studios but have also starting producing their own movies.
Last year, subscription streaming (SVOD) expanded 30% to reach $9.5 billion in revenue in the US alone. In addition, consumers spent $2 billion to purchase digital movies through services such as iTunes and Vudu plus $1.9 billion to rent movies online.
The best-selling titles of 2017 were ‘Moana’, ’Rogue One: A Star Wars Story’, ‘Beauty and the Beast’, and ‘Wonder Woman’.
Hollywood cannot continue to ignore the trend and Variety believes that it will “renew pressure on studios to adjust theatrical distribution windows, particularly since the 2017 box office was down from the year before and saw fewer moviegoers”.