IHS: Online movie views set to surpass DVDs

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2012 could be the first year that U.S. consumers watch more movies online than on DVDs, Blu-ray discs and other physical video formats, according to new research from IHS.

Legal online movie consumption through providers like Netflix (Nasdaq: NFLX) could hit 3.4 billion views or transactions in 2012, about 1 billion units more than the 2.4 billion physical video products expected to be sold for this year, according to the IHS Screen Digest Broadband Media Market Insight report. If that happens, it will mark a major change from 2011, which saw 1.4 billion online movie views, but about 2.6 billion physical format transactions.

The decline in physical format video sales is not really a surprise to anyone, though many in the cable TV industry might have assumed this tipping point already had been reached. With 135 percent online movie consumption growth from 2011 to 2012, IHS predicts that this could be the year that most people start accept the idea that consumers will accept premium content distribution over the Internet.

However, even as online movie viewing moves ahead of physical products, it still will get nowhere near the revenue share those physical products generate. Online viewing via subscription services will bring in less than $2 billion this year, while DVDs and the like deliver more than $11 billion. IHS said consumers pay an average of only 51 cents for each movie watched online.

For more:
-see this press release

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