January 7, 2014

Here’s a quick follow-up to my last post on video streaming. Digital Entertainment Group, an industry trade association, just reported in the Wall St. Journal that online movie/ TV show purchases surged 47% to $1.12 billion in 2013. Subscription rentals, dominated by Netflix, was up 32% to $3.16 billion. Physical sales—buying DVDs and Blu-ray discs—was $7.78 billion (down 8%). DVD rentals, another category ruled by Netflix, dropped 19% to $1.02 billion. Rentals at stores fell 14%. Finally, the kiosk DVD rental business controlled by Redbox slipped 1%.

What do all these numbers mean? The world of streaming is growing by 30% to 47% a year, while traditional video options are declining 1% to 19% a year. Steaming will soon be King.

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