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Netflix Leads to Decreased DVD Sales for Movies and TV Shows

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Netflix streaming has been seen as a good value by consumers since it was created, allowing them to cut back on other premium entertainment purchases in favor of a small monthly bill. Now, a study by IHS quantifies how Netflix impacts entertainment spending when it enters new markets.

Before Netflix streaming began in the U.S. in 2007, DVD sales were already falling by 1.2 percent each year. After Netflix streaming launched, disc sales have fallen by an average of 10.3 percent each year.

Netflix streaming debuted in the U.K. in 2012, leading to a steep 14.5 percent drop in DVD spending. Sales of boxed sets of TV series were hard hit, and TV show rentals are down by nearly 75 percent.

“The year before Netflix launched its streaming service in the USA, consumers spent $20.9 billion buying and renting movies and TV content, the most ever recorded,” says Davis Jayalath, a senior researcher at IHS. “But by last year, total spending on these two key genres, including via transactional and subscription VOD services, was down by 17 percent to $17.3 billion.”

In the U.K., combined spending for movies and TV shows is £82 million per year less than it was before Netflix streaming debuted.

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