The importance of sales of DVDs to the entertainment industry is waning as the home entertainment industry enters a period of profound change with consumers switching from buying actual discs from multiple brick & mortar and online outlets to streaming and digitally downloading movies and TV shows from a few mega suppliers.  According to Home Media Magazine, the Arizona-based research firm In-Stat predicts that, while Blu-ray sales will continue to increase, they won’t be enough to offset the drop in sales of conventional DVDs.  The total U.S. DVD market, which accounted for an estimated $13 billion in sales in 2009, will drop by $4.6 billion by 2014.   Taking up the slack will be streaming and digital downloads, which will grow from its current level of $2.3 billion to $6.3 billion by 2014.

Starting with videotapes, home entertainment sales have been a huge boon to Hollywood, which has seen attendance at theaters lag (record box office numbers are the result of higher ticket prices, not growing attendance).  After continuing growth in DVD sales the early years of this Century had made disc sales the ultimate arbiter of profitability, the box office ticket sales total of $9.87 billion in 2009 overtook sales of movie-based DVDs and Blu-rays, which declined to $8.73 billion for the year.

The amount of change in the home entertainment industry can be gauged by a recent comment from Netflix’s Reed Hastings, who during the company’s third quarter earnings call, said that his company is “now primarily a streaming company that also offers DVD-by-mail.”