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Streaming overtakes DVDs for first time as home entertainment spikes after seven year decline

Companies like Netflix have aggressively chased the home entertainment market while investing heavily in making online streaming a better viewing experience

An explosion in subscription streaming was the driving factor behind an upturn in home video entertainment after a steady seven-year decline.

For the first time, digitally delivered – or streamed – movies topped movie rentals in the second quarter of 2012, with consumers spending $1.2 billion on streamed movies, an increase of 81 per cent.

The first six months of 2012 saw consumer spending on home entertainment hit $8.4 billion – a 1.4 per cent gain from the same period last year – according to new figures released on Sunday from the studio-backed Digital Entertainment Group.

The spike in subscription streaming comes after heavy investment by companies like Netflix and Lovefilm on improving consumer and viewing experience online.

Spending on subscription streaming hit $548.6 million in the first half of 2012, up from $85 million in the first six months of 2011.

Overall subscription revenue for the first six months of 2012 was $896.6 million, up 18.6% from $755.8 million at the same juncture last year.

The news will be met with joy by Hollywood and independent studios who have lived in fear of online piracy.

Home entertainment remains critical to the health of the film industry, as most studios and funding bodies often see their investments return during the ancillary windows of a film’s release. A cinema release remains de rigeur for films at all levels of the industry, but it is hoped the goodwill created by a good press, word of mouth and strong box office bleeds sustains through to a profitable home entertainment release.

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