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Streaming spend to surpass DVD purchases

Britons’ total spend on video streaming subscriptions and downloads is set to surpass that spent on buying and renting DVDs, according to Strategy Analytics research

Britons’ total spend on video streaming subscriptions and downloads is set to surpass that spent on buying and renting DVDs, according to Strategy Analytics research.

The research found that 2016 is set to be the first year in which tangible purchases are outstripped, with a predicted 23.7 per cent increase in streaming and downloading spend.

The increase will see consumers spend a total of £1.31 billion on streaming and downloads, compared to £956 million on DVDs and Blu-rays.

The change represents a 16.3 per cent decline for physical video purchases, dropping below the £1 billion mark for the first time since 1994.

Online formats will, thus, account for 58 per cent of home video spend, compared to 42 per cent for DVDs, whose share in 2015 was 52 per cent.

“Five years ago, DVDs represented 86 per cent of consumer spend on home video, in five years it will be less than 14 per cent, with DVD/Blu-ray rental virtually extinct,” said Michael Goodman, Strategy Analytics’ digital media director.

“As online provides increasing ways to access films and box-sets, physical simply can’t compete. Although many people will always prefer a physical disc, retailers will have to decide whether it’s even viable to offer that format in five years’ time.

“Many won’t and with less high street players around, it will be online, ironically, that keeps DVDs on life support via e-commerce.”

Streaming subscription services, such as Netflix and Amazon Prime Video, are the fastest-growing format, rising 36 per cent to £742 million – or £1 in every £3 spent on home video. There are around 4.6 million Netflix households in Britain and 2.5 million with Amazon Prime.

Around 20 per cent of households who subscribe to a video streaming service, subscribe to at least two.

The research claims that video streaming subscriptions will be the dominant format from 2017 onwards and will account for over half of consumer home video spend by the end of 2021.