DVD Sales Plunge in U.S., Digital Sales On the Rise

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Down, down, to obsolescence town–that might just be the broad-view takeaway from Los Angeles-based Digital Entertainment Group’s recent sales report (via Financial Times), which suggests new DVD sales in the U.S. plunged 20% over the past 12 months.

It wasn’t just customers fleeing a sinking ship: DEG notes the drop was in part due to four “tentpoles” totaling $1 billion in Blu-ray and DVD sales 1Q 2010. Also: the 2010 Easter holiday (it calls this “a considerable home entertainment buying season”) fell outside the sales period.

It wouldn’t be a total downer were the decline offset by new spend in related areas, but it wasn’t, as sell-through of “packaged goods” (DVD, Blu-ray) fell from $2.6 to $2.1 billion. In fact total U.S. “home entertainment spending” was down from $4.6 to $4.2 billion, a decline of nearly 10 points.

On the upside, digital sales rose 9%, while subscription-based rental and streaming surged a whopping 33% from $523 to $696 million. Also on the rise: kiosk rentals, up a surprising 30%. You’ve probably seen these set up in the entryways of grocery stores or other large-scale merchandizers. I’ve never used one, and always assumed they’d tank. I stand by that assumption–physical media’s days are numbered–but perhaps the “availability” of kiosks as brick-and-mortar stores shutter makes them temporarily relevant while we’re in transition to digital-only.

I haven’t rented a DVD in years. I pick up Blu-ray copies for the rare shows or movies I’ll watch more than once (Blu-ray spending is actually up 10 percent for 1Q 2011), catch shows streamed post-broadcast off network websites (run through my laptop’s HDMI output to my living room TV), or wait for stuff to hit my streaming-only Netflix queue.

And once studios gets their back-catalogues up and start quick-releasing digital content at (or better than) parity with disc-based content, I’m looking forward to never buying a piece of “here-today, dated-tomorrow” physical media again.