SVOD to outpace DVD sales in 2015, analyst says

Could the DVD be completely obsolete in just a few years? The market seems to be shifting that way: By the third quarter of 2015, subscription video on demand (SVOD) services will bring in more revenue than disc sales. And consumers will spend "at least" three times longer watching streamed video than DVDs, according to nScreenMedia.

Interestingly, said analyst Colin Dixon, household penetration of Blu-ray and DVD players is still 81 percent, or 139 million U.S. consumers. However, those device owners are using them less and less to play videos on discs, with time spent watching DVDs on them dropping 2.4 percent between the third quarter of 2013 and the third quarter of 2014. Users currently watch 5 hours and 16 minutes of DVD or Blu-ray video on average.

Sales of DVDs fell 8 percent year-over-year as well, Dixon said, citing a study by Digital Entertainment Group.

"A Blu-ray disc player purchased by a consumer today includes streaming media services like Netflix and YouTube. This might explain the sharp difference between the decline in disc rentals and purchases and in the use and ownership of disc players."

SVOD is on the rise, he noted, pointing out that revenues crossed the billion-dollar-per-quarter mark this year and that they grew 26 percent year-over-year. That jibes with a recent Magid report that found that 83 percent of U.S. consumers surveyed said they streamed video at least occasionally.

The enduring popularity of streaming-enabled Blu-ray players isn't surprising: Value-minded  consumers who are still transitioning from DVD watching to streaming, or who want a reliable HD picture, still find them a good buy. Consumer Reports in June recommended the players over dedicated streaming units, pointing out that their price point, around $100, was similar to that of devices like Amazon's Fire TV.

However, dedicated streaming devices themselves could gain a lot of ground in the next couple of years; Streaming Media's Dan Rayburn pointed out in May that most load much faster and are easier to use than hybrid devices like game consoles or Blu-ray players. And as streaming standards are firmed up and broadband networks become ubiquitous, video quality will likely continue to improve.

For more:
- see this nScreenMedia post
- Consumer Reports has this story

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