Film streaming and downloads to overtake box office in 2017

The growing popularity of downloads and streaming services like Netflix means that Blu-ray and DVD sales are declining 



A study by PricewaterhouseCoopers (PwC) has declared that the market for DVDs and Blu-ray is quickly declining, with the slack taken up by increasingly popular on-demand streaming services like Netflix – which will also overtake cinema box office revenues in the coming years.

The study says that revenue from electronic home video (ie streaming and downloading films) will outstrip physical media in 2016, and that the market for physical media will drop from $12.2bn now to $8.7bn in 2018. They also predict that in 2017 electronic home video will overtake the traditional cinema as the biggest contributor to total film revenue in the US, reaching a total of $17bn the following year – double the $8.5bn the sector currently generates.

That's not to say the multiplex is under threat – PwC predict a 16% increase in ticket sales over the next five years. "People still want to go to the movies, especially the big tentpole films," said Cindy McKenzie, managing director of PwC's entertainment, media and communications arm. She also pointed to the cheap and easy distribution allowed by digital media as being a major cost saving: "The amount of money that you're making per transaction may not be the same, but it is cheaper to distribute things digitally."

Netflix, Amazon Instant Video and the popular US streaming service Hulu are funnelling their growth into ambitious production projects: all have quickly made the jump from mere middlemen to creators of original content, with hits like House of Cards and Arrested Development. Netflix's revenue rose an astonishing 24% in the first quarter of 2014.

In the music market, streaming is eating into downloads to the point where Spotify's streaming revenue is beginning to outpace iTunes' download revenue in certain parts of Europe – perhaps a catalyst for Apple's recent purchase of streaming service Beats Music. But downloads of films are still growing (albeit at a much lower pace than streaming) and topped $1bn in revenue for the first time last year, driven in part by high-quality downloads becoming available before physical and streamed versions.

PwC also announced that ebooks would overtake printed books as the UK's most popular reading format by 2018, with revenue to triple to nearly £1bn over the next four years.