by: Tom Yadron
According to a study released on March 23rd by IHS Screen Digest, online video will surpass physical video in viewing volume this year. This transition marks a major turning point in the way people approach video consumption in the U.S. “We are looking at the beginning of the end of the age of movies on physical media like DVD and Blu-ray,” said Dan Cryan, IHS Senior Principle Analyst, Broadband & Digital Media.
Online video views will double to 3.4 billion this year while physical viewings will decrease from 2.6 billion to 2.4 billion, according to IHS.
A complete transfer to solely internet-based viewing will not come quickly however, Cryan emphasizes. He notes that even after the advent of iTunes nine years ago, CD sales continue today.
While online (video watched legally online through pay per view or subscription) will beat out physical (individually purchased video’s on DVD, Blu-Ray, VHS) in number of views, physical video will continue to win out in total sales and hours watched through the near future. In fact, consumers pay 51 cents on average for films online while they pay $4.72 for DVDs. This has encouraged some media companies to continue to push for a cloud-based platform where viewers can upload their collection of videos to a cloud for future viewing.
On March 13th, for example, 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Studios and Warner Bros. agreed to a deal with Wal-Mart that will allow their customers to store digital copies of their video’s in a cloud. With this approach, studios can take advantage of the increasing preference towards on-demand consumption while still benefiting from the dominant sales of physical video.
The shift in video consumption habits goes hand in hand with the increasing presence of advertisers online. Online video steaming gives advertisers a better chance to reach consumers, as they will have to maneuver their way through websites to reach their desired video. Watching a DVD at home is more of an isolated experience. So, lucky for us, this monumental shift is good news for advertisers looking for a chance to grab consumer attention.