Netflix Leads to Decreased DVD Sales for Movies and TV Shows
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.
SVOD isn't the only game in town. Many people rent or purchase movies or TV shows, and that audience likes physical video discs.
05 Jul 2018
The SVOD leader says it throttled data rates for its customers own good, but the decision still outraged many—including AT&T executives.
28 Mar 2016
The subscription video-on-demand leader keeps growing, putting it on a collision course with the networks its relies on for licensed content.
04 Mar 2016
The algorithm wizards at Netflix pull back the curtain and show how they use worldwide data to improve local and personal recommendations.
18 Feb 2016
While some pay TV operators have seen increased customer satisfaction with Netflix integration, others will likely face lower average revenues.
12 Feb 2016
One-size-fits-all encoding doesn't produce the best possible results, so Netflix recently moved to per-title optimization. Learn why this improves video quality and saves on bandwidth, but isn't the right model for every company.
14 Jan 2016