For first time, movie streaming to beat viewing by DVD

Later this year, movie streaming over the Internet is expected to overtake traditional home viewing of movies on DVD and Blu-Ray, which means consumers could wind up spending far less on the movies we watch.

Kai Ryssdal: Turns out this is going to be a big year for the movie industry. "Hunger Games" aside, it's not necessarily going to be a year of record ticket sales or blockbuster franchise.

No, according to the research firm IHS Screen Digest, later this year, movie streaming over the Internet is expected to overtake traditional home viewing of movies on DVDs and Blu-Rays, which means consumers could wind up spending far less on the movies we watch.

Here's our senior business correspondent Bob Moon.


Bob Moon: On the surface, it sounds like blockbuster news for the entertainment industry: The report predicts the number of movies rented or purchased online will jump by 135 percent this year. But consumers are expected to spend $11 billion buying DVDs and Blu-ray discs this year. Compare that to less than $2 billion they'll spend on movies over the Internet.

As CNET senior writer Greg Sandoval sees it, this could be one of those scenes with a train barreling straight down the tracks -- toward Hollywood.

Greg Sandoval: It can't be good news for the studios and creators, because if it happens quicker than they think, they're unprepared. They haven't figured out how to make money off of streaming yet.

Sandoval explains that "all you can eat"-style subscription services are eating up much of the revenue.

Sandoval: When you stream, they're paying much less money for their video than if they were buying.

Sandoval says the industry has looked at streaming as something in the future -- but the future is now.

Shelly Palmer is the author of "Overcoming the Digital Divide." He says the studios need to re-learn an important lesson.

Shelly Palmer: They were completely convinced that VHS tapes would put them out of business, then they were completely sure that DVDs would put them out of business. And in both cases, both technologies enhanced sales dramatically.

Palmer says the key is embracing what consumers want.

Palmer: As long as the movie studios fight the good fight by making it super easy to stream legally, by making the price appropriate for a legal stream, they're going to have a good line of defense.

You could say they need a strategy right out of the movies.

Marlon Brando in "The Godfather": I'm going to make him an offer he can't refuse.

I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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