A report from Maryland-based think tank In-Stat said that physical DVDs — including Blu-ray that will increase slightly — will become less important to the entertainment industry and sales will decline by $4.6 billion between 2009 and 2014.
Streaming video and digital downloads are quickly becoming the more desirable delivery methods. In-Stat reported that downloads and streaming revenue is expected to grow from the $2.3 billion it generates now to $6.3 billion "within five years."
Although the findings are based on mainstream entertainment, the adult industry has led the way in streaming and it's likely the continued decline in DVD sales will accelerate in porn as well.
"Video disc rentals will continue their significant decline," In-Stat principal analyst Keith Nissen said in a statement. "The convenience and utility of the online offerings are simply too compelling."
The market research firm also said that streaming could also affect the TV business, predicting that download revenue of U.S. television programming could "more than triple" between 2010 and 2014.
In-Stat also said that VOD subscription revenue could hit $3.5 billion by 2014.
The popularity of streaming is becoming more and more evident ad important to major companies like Apple that reported in its announcement of Apple TV earlier this year that consumers would rather stream a movie than download it onto their set-top box. The Apple box allows streaming and movie rental but doesn’t allow for storage.
Another key player, movie rental pioneer Netflix quickly shifted its strategy to streaming. Netflix CEO Reed Hastings said his company is "now primarily a streaming company that also offers DVD-by-mail."
