Worldwide video on-demand rentals (OTT and pay TV operator), electronic sell-through (EST) and DVD/Blu-ray disc sales are expected to grow 40% over the next five years from $30.6 billion to over $43 billion, according to ABI Research.
The research reveals that while physical media sales will continue to decline, OTT VOD services and ad-based viewing will take significant market share from combined physical purchases and EST, whereby consumers pay a one-time fee to download a media file.
However, despite the decline, physical media is expected to play a significant role for many consumers – particularly for those who have extensive DVD/Blu-ray libraries, purchase 4K TVs and want higher quality video than HD streaming services, or simply prefer having a copy in hand.
“New content windowing strategies, such as early VOD and EST release dates, will continue to push consumers to these distribution channels,” said senior analyst Michael Inouye.
“In addition, as pay TV operators increasingly pursue OTT initiatives the consumers will further migrate to digital distribution.”
Practice director, Sam Rosen, added: “As consumers move to digital distribution the wildcard in this transition remains the pay TV operators who, for the time being, still hold the most bargaining power for content rights.
“How these operators approach multiscreen services will dictate how well these players retain control over when, where, and how consumers watch video. Recent activity in OTT services and content purchases from operators like AT&T, Verizon, and Dish offer a glimpse into how these incumbents are working to move with consumers as viewing behaviour changes.”
