People have been predicting the death of physical media for years, and now, according to research from the IHS Screen Digest, we may have finally reached the point when streaming video services have become ubiquitous enough to take over American households. The researcher forecasts that 3.4 billion movies will be legally consumed over streaming services this year, more than double the 1.4 billion that were viewed last year over the internet. The number will also beat out DVD and Blu-ray viewership, which is estimated to come in at 2.4 billion this year — a 7.7 percent drop from 2011.
While there's no denying that the research shows that consumers are now comfortable with the notion of streaming movies (with help from video game consoles) and have internet connections that can handle the bandwidth requirements, the numbers appear to be inflated by unlimited streaming services like Netflix and Amazon Prime Instant Video. Such services accounted for 94 percent of all streaming viewership last year, according to the IHS, with only 1.3 percent coming from pay-per-use services like iTunes and others. The dominance of unlimited services explains why movie studios may not be so happy to see more and more of the market shift to streaming — the researchers say that customers paid an average of 51 cents per movie watched online compared to $4.72 for those purchased on physical media.
The studios have been making their play at keeping physical media relevant with disc-to-digital conversion service UltraViolet, which launched in October of last year to some negative feedback. The program is expected to get a boost from the recently-announced Walmart service that will convert customers' discs for them at a fee of $2 to $5, but UltraViolet still faces plenty of problems — including the mess of DRM that it wraps its movies in. Whether or not UltraViolet can make more customers opt to buy DVDs and Blu-rays isn't clear, but streaming will definitely continue to grow. Netflix just launched its first piece of original content, Lilyhammer, and Comcast Streampix and a recent Red Box-Verizon joint venture will see consumers faced with an even wider range of streaming options in the near future.