DVD and Blu-ray are still Hollywood’s big earners, while iTunes dominates online VOD

1 Feb 2013

A report on how US viewers are watching films shows that physical discs are still providing Hollywood with plenty of revenue, while Apple’s iTunes dominates next-generation video-on-demand services.

NPD Group’s ‘Monthly VideoWatch’ and ‘VideoWatch Digital’ consumer trackers take a look at how the US internet population is watching movies. Surprising as it may seem, sales of video discs – be they DVD or Blu-ray – are still Hollywood’s largest source of home-video revenue, accounting for 61pc of home-video spending on movies in 2012.

This is a drop from 64pc in 2011, but NPD attributes the decline to a 7pc fall in prices for Blu-ray discs.

“There is a significant base of video customers in the US who continue to be comfortable with physical formats, and a large majority haven’t made the complete transition from discs to digital video,” said Russ Crupnick, vice-president of industry analysis at NPD Group Crupnick. “For the time being, at least, consumers still like to own and rent movies and TV shows on DVD and Blu-ray, even in a world of where connected devices and digital rental, streaming, and ownership options are becoming more accepted and commonplace.”

Internet video-on-demand

But when it comes to the next generation of film consumption, online is where it’s at. For the internet video-on-demand market, which includes paid-for video-on-demand services from cable, satellite and telecommunications providers, market share has increased by 1pc to 12pc in 2012.

Apple’s iTunes is streaks ahead with 45pc of the share, followed by Amazon Instant Video at 18pc. However, these figures don’t account for subscription services, where Netflix is the dominant force.

TV in greatest demand

NPD Group also looked at how viewers are increasingly turning to on-demand services for TV programmes. The global information company reports that 80pc of Netflix’s Watch Instantly rental transactions were TV shows, and 90pc of all electronic sell-through transactions (such as those offered on iTunes) were TV programmes.

Meanwhile, Apple is also growing the on-demand options available through its Apple TV set-top box. Bloomberg claims that the tech giant is about to finalise a deal with HBO to provide its HBO Go app on Apple TV, which will give users access to more than 600 hours of HBO films and TV shows. HBO Go is already available on Roku and Xbox, as well as on mobile apps for the iPad and iPhone, and the prospect of an Apple TV addition has been welcomed by users. However, HBO Go is only accessible by HBO’s cable and satellite subscribers, so Irish users won’t get a look in.

Discs image via Shutterstock

Elaine Burke is the host of For Tech’s Sake, a co-production from Silicon Republic and The HeadStuff Podcast Network. She was previously the editor of Silicon Republic.