Online-Film Viewing in U.S. to Top Discs in 2012

Consumers Pay 51 Cents Online Compared With $4.72 for DVDs

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Online-movie viewing in the U.S. will exceed digital video disc and Blu-ray use for the first time this year, according to researcher IHS Screen Digest.

Legal online viewings of films will more than double this year, to 3.4 billion, IHS said in a statement. Physical viewings of DVDs and Blu-ray discs will shrink to 2.4 billion from 2.6 billion, according to the forecast.

Unlimited-streaming subscription plans, including those offered by Netflix and Amazon's Prime service, accounted for 94% of all paid online-movie consumption in the U.S. last year, IHS said. Streamed movies have been replacing video discs, much as streamed music is overtaking compact audio discs.

"We are looking at the beginning of the end of the age of movies on physical media like DVD and Blu-ray," Dan Cryan, IHS senior principal analyst, said in the statement. "But the transition is likely to take time: Almost nine years after the launch of the iTunes Store, CDs are still a vital part of the music business."

The report highlights the price disparity between online purchases and movies sold in retail shops. Consumers are paying an average of 51 cents for every movie consumed online, compared with $4.72 for physically purchased videos, IHS found.

Five major studios announced on March 13 an exclusive agreement with Wal-Mart Stores that may reignite home-video purchases by giving consumers the option to store digital copies in the cloud. The program, called disc-to-digital, lets consumers pay a fee to convert physical libraries to digital, and could become a new source of revenue.

-- Bloomberg News --

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