Breakthrough Year for Online Movies
Even though IHS predicts a steady rise in online movie viewing through 2016 as disc sales decline slightly, physical media’s prospects are not as gloomy as they may seem. Owing to multiple viewings of favorite titles, movies on disc are expected to command 4.3 billion hours of viewing time this year compared with 3.2 billion hours for online movies. And when it comes to the revenue that keeps Hollywood humming, the disparity is even greater, with online movies expected to bring in $1.7 billion, or about one sixth of the $11.1 billion physical media will generate.
IHS expects this pattern to hold through 2016, when revenue for online transactions is projected to account for 17 percent of all video transactions while physical media captures 75 percent and pay TV 8 percent. On the whole, our appetite for watching movies at home is robust. “The growth in online consumption is part of a broader trend that has seen the total number of movies consumed from services that are traditionally considered home entertainment grow by 40 percent between 2007 and 2011, even as the number of movies viewed on physical formats has declined,” Cryan says.