After years of trying to convince consumers to buy movies online, Hollywood found a solution in 2013: Make it the only option.
Sounds like the ploy worked — but:
Digital growth just barely made up for ongoing declines in sales and rentals of physical discs. The total U.S. home-entertainment market remains well below its peak of more than $22 billion 2004, a drop that has squeezed the profits of every studio and led to widespread cost cutting.
And buried at the end:
Also helping digital sales, executives said, have been price cuts that mean most releases are now offered for $15 to $20.
In other words, digital sales of films are doing better because Hollywood created new (false) release windows and slashed prices — but they’re still not doing anywhere near as well as the DVD heydays.
I would credit two other things as well. First, Netflix is becoming less and less about movies, so services that are actually about movies, like iTunes, are seeing better sales. Second, with services like iTunes in the Cloud, I no longer have to download and store several gigabytes of data when I buy a movie. Instead, I can just stream it when I want it. Yes, I still “own” it, but I store it elsewhere.
So when a rental costs $5 but will only be available in two weeks, and a purchase costs $15 available immediately, I’m now buying more films again — especially because I don’t have to worry about where to store them. And $15 is actually now about the price of a ticket for one to the movie theater.