Fringe Benefits from the Decline of DVD

According to a recent report from the research group Screen Digest, DVD sales declined by 4.7% in 2008, and that Blu-Ray “barely made a dent in the missing revenue”. They conclude that the new format won’t spur “minimal sector growth” until 2010. It’s rapidly becoming clear that VOD (video on demand) will eventually become the dominant form of home entertainment. In a Wall Street Journal article about Netflix CEO Reed Hastings, it claims he is “is quickly trying to shift Netflix’s business — seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.” Hastings sees the DVD by mail business to start declining in four years, and hence his deals to stream movies on the XBox and other set-top devices, like the Roku. Packaged discs will not disappear entirely, but will likely lose a large percentage of their market share.

The benefit to consumers in the short term…sales! I recently talked about my cherry-picking of Battleground from the demise of the Virgin Megastores in NYC, but this new downer of a report spurred me to check out what was left of DVD retailers in Manhattan. I waltzed into a small reseller on 14th Street, which was having a massive sale where you could purchase 2 discs for 10 dollars. I ended up with Wilson Yip’s Kill Zone (aka SPL), John Woo’s Hard Boiled, The Buster Keaton Collection from Columbia, and Gremlins 2 (a personal favorite)…all for a total of $20.

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