Traditional Video Outsells Online Content

Stack-of-DVDsConsumer purchases on online video content are rising rapidly -- but still are only one-tenth of the business when it comes to traditional packaged video sales, including DVD purchases.

Strategy Analytics says online video content will grow to $3.5 billion by the end of 2011, thanks to Netflix, Hulu, and over-the-top TV/video businesses. Still, it doesn't look to overtake package video sales anytime soon, given consumers' different valuations for online video.

“Online retail growth in particular is flattening in maturing markets," states Ed Barton, director of digital media at Strategy Analytics. "In what is becoming a recurring theme, consumers do not value ownership of digital media to the same extent they did for packaged media.”

Another research study by Futuresource said in 2010 that packaged video pulled in $42 billion globally. It expects this to sink to $33 billion by 2014.

Looking at all packaged media -- which includes large categories of gaming and music as well as video -- consumers are poised to spend $52 billion by 2014, which will be about half the spend of all consumer spending on media. That includes packaged media, which is projected to hit $112 billion by 2014.

Although there has been a consistent declines in packaged media versus the growth of digital media sales, analysts estimate the business will be a contributor of overall consumer entertainment sales for years to come.



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