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Hollywood Reaches a Crossroads as Home Video Revenue Drops 2 Percent in 2009

New Revenue Streams Not Developing Fast Enough to Offset Plummeting DVD Sales

Boston, MA - March 22, 2010 – The filmed entertainment industry, which has until recently enjoyed steady growth on the back of DVD sales, is now suffering a rapid decline in DVD sales while lackluster adoption of the new, high-definition Blu-Ray disc format has thus far not come close to offsetting lost DVD revenue. According to a new report published by the Strategy Analytics Digital Media Strategies service, global DVD sales plunged 9% last year to $33 billion and will drop a further 12% in 2010. The report, “Global Audiovisual Market Forecast,” predicts that while global Blu-Ray sales will reach $6.5 billion this year that will not be enough to offset the expected continued drop in DVD sales.

“DVD sales figures will continue to fall in the coming years and we do not expect Blu-Ray sales to make up for the loss,” commented Jia Wu, Analyst at Strategy Analytics’ Digital Consumer Practice. “The Blu-Ray format faces greater competition from DVDs than DVDs did from VHS. Also, Blu-Ray will have to compete with next-generation digital on-demand services.”

“Now is the time for Hollywood studios to accelerate plans for digital distribution in addition to Blu-Ray,” added Martin Olausson, Director of Digital Media Research at Strategy Analytics, “Otherwise, the industry is poised to face the prospect of a worsening home video market in the years ahead.”

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Jia Wu
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