Study Says Streaming Will Overtake Physical Media Revenue In 2016

No matter what your feelings may be about the battle between physical media and streaming, numbers suggest that physical media is losing the fight. And in the entertainment business, when money is the bottom line, that suggests a dire future for disc media. A new study says that while box office and digital revenue are expected to climb through 2019, sales and rentals of DVD and other disc media will fall sharply.

The study predicts that revenue from streaming media will overtake that of disc media, and that physical media can expect to suffer a 20% drop in revenue by 2018.

Variety points to the study by PwC. This is just one study, of course, and no doubt there will be plenty of data thrown around by home-video divisions of various studios to prop up the argument that disc media is still going strong.

And none of this is meant to say anything about the value of physical media for consumers, and especially hardcore fans. Clearly, the primary virtues of streaming media are immediacy and related convenience. But if you want to be sure something is presented in its proper aspect ratio, Netflix may not be much help. For preservation and extra features, discs are still the place to be.

PwC comes to the conclusion that by 2018 we'll have seen a shift to streaming media as a primary source of revenue for "filmed entertainment," even taking the top spot over box-office grosses. The projection is for a growth from $8.5 billion in 2014 to $17 billion by 2018. Box-office ticket prices, meanwhile, are expected to climb on average to $9.81 by 2018, with a total $12.5 billion domestic gross that year.

The study raises more than a few questions, but the biggest one, which has been discussed often of late, is the precise accounting of revenue from VOD rentals and sales. Scott Tobias recently wrote a great piece for The Dissolve talking about the lack of transparency when it comes to VOD revenue; we don't know what most films are making in their day and date On Demand plays. Just as the precise menthols PwC used to determine its findings are somewhat hidden, accounting on the VOD side is far from transparent.