According to a report by market research firm Screen Digest, retail sales of Blu-ray HD movies rose 64.2 percent year to year, as disc rentals ballooned 105.5 percent.
And coming as no surprise to the adult industry, the overall DVD market declined 3.8 percent primarily due to a 15.6 percent drop in retail DVD sales amounting to $1.5 billion. Retail sales, according to the researcher is the largest segment of the home video market.
DVD rentals, the second most important segment, also contributed to lowering the overall market. Rentals declined 12.4 percent, or $749 million.
New technology — especially Blu-ray discs and Internet rental and sales provided by cable TV, satellite and phone companies — drove the downturn in the traditional DVD market.
But the report pointed out that despite its growing strength, the network segment amounted to only 12.2 percent of the total $18.5 billion video entertainment market last year while physical rentals and sales of DVDs accounted for the rest, which is why Hollywood first releases movies on DVD before licensing them for Internet delivery through companies like Netflix.
And Internet delivery of movies is expected to continue to hurt DVDs. The research reported that revenue from all types of electronic delivery rose by 21.9 percent in 2010 which marks a milestone by exceeding 10 percent of total market revenue for the first time.
"Screen Digest expects the network segment to gain share in the overall market during the coming years, leaving studios with a delicate balancing act as they attempt to revive growth in overall home video entertainment revenue in this post-recession era," Screen Digest analyst Tom Adams said.