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Get ready to pop the cork on the champagne bottle, digital download fans. In yet another sign that we are surely now living in the future, a new report is claiming that legally streamed and downloaded movies and TV shows are going to top DVD/BD sales for the first time ever this year.

IHS Screen Digest says that subscription services like Amazon and Netflix, when combined with digital sale and rental  services like iTunes and Vudu, will conduct about 3.4 billion individual transactions in the U.S. this year—an increase of 135 percent over 2011. Physical media such as DVD and Blu-ray, in comparison, will chalk up a predicted 2.4 billion transactions.

Dan Cryan, senior principal analyst of broadband & digital media at IHS, said the following about this massive paradigm shift:

“The year 2012 will be the final nail to the coffin on the old idea that consumers won’t accept premium content distribution over the Internet . . . In fact, the growth in online consumption is part of a broader trend that has seen the total number of movies consumed from services that are traditionally considered ‘home entertainment’ grow by 40 percent between 2007 and 2011, even as the number of movies viewed on physical formats has declined.”

At the same time, cautions Cryan, the demise of the physical disc and its ultimate replacement by downloads and streaming will be a long, slow process:

“After more than 30 years of buying and renting movies on tapes and discs, this year marks the tipping point as U.S. consumers now are making a historic switch to Internet-based consumption, setting the stage for a worldwide migration of consumption from physical to online . . . We are looking at the beginning of the end of the age of movies on physical media like DVD and Blu-ray. 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.”

Do your media consumption habits fall in line with IHS’s numbers, Insiders?

[via Paid Content]

12 Responses to “Report: Online Movies to Surpass DVDs in 2012”

  1. Member [Join Now] [free-flixsnow]

    Amazing, but unless more bandwidth is made available, the choke will be a major issue, if not the cost of data plans which are rising. Should be interesting to watch the evolving industry where streaming will rule, if we can afford it. lol

  2. Visitor [Join Now]
    firstlawofnature [visitor]

    ‘The year 2012 will be the final nail to the coffin on the old idea that consumers won’t accept premium content distribution over the Internet’

    Who’s been saying that? Sounds rather uncontroversial. By including netflix in with internet sell through and rentals he makes his point more pointed.

  3. Visitor [Join Now]
    Vernon Dent [visitor]

    -Do your media consumption habits fall in line with IHS’s numbers, Insiders?


    DVD and BD are the premium content distribution.

    Where are the: multi-lingual or SHD subtitles; the choice of audio tracks, the featurettes; the coming attractions etc., etc. with streamed content?

    It seems that both sources have it ‘half-back asswards’!

  4. Visitor [Join Now]
    2317 [visitor]

    Digital Media is great, but give me the option with all things being equal(price #1). I will always choose the physical media. Much less of a chance of hiccups in the showing, pausing…fast forward and rewind are all better on disc than digital. Like others have said too, even though the “extras” have been severly toned back on DVD you STILL get more than the nothing with digital streams.

  5. Visitor [Join Now]
    Phil [visitor]

    Big difference between a rental streaming and actually buying online content. What are the numbers for actual digital purchases (where an end user buys a full movie and “owns” it) compared to BD/DVD purchases? I have absolutely no issues with streaming a rental, as long as it is comparable to Redbox prices (i.e. Amazon’s daily deals), or subscribing to Netflix streaming, etc, but I will not buy a movie where I can’t hold the physical media in my hands.

  6. Member [Join Now]
    TheTunnelDVD [thetunneldvd]

    I knew we were headed this way, but personally I hate streaming video…


  7. Visitor [Join Now]
    DanoFive0 [visitor]

    It really is the way to go. But the bandwidth needs to go up! up! and up!
    And the choke will come soon. As the Cable and Phone Co’s start putting
    the price to you. I mean Big time! I bet we will see a Big, Big price jump in the next few years… One great thing I see on Netflix.. They now have over 2,000 movies and TV shows with Closed Caption and SDH on them. And more all the time…I have them online and Block Buster two out at a time. And I can hit Redbox if i like…
    I pay less then $28.00 a month for Nextflix online and Block Buster two out at a time.. And when I add RedBox.. I am under $36.00 a month..
    Great deal… I caned the Cable TV….

  8. Member [Join Now]
    Mike [dodgerny]

    I love my physical media, have collected them for years and will not stop if the studios get their wish to stream movies.

  9. Member [Join Now] [free-flixsnow]


    It appears many purchase their movie media over just renting. Collecting is one thing, but cost is another, so how many actually purchase vs. renting?

  10. Visitor [Join Now]
    James [visitor]

    I agree if i really like a movie or think it’s one i really like i will purchase it on bluray but if not i will rent it through redbox or blockbuster online I will not pay to rent a movie over the computer that’s just stupid.