On-Demand Revolution Spells Doom for DVD and Blu-ray

Will you shed a tear for the DVD format when it's dead and gone? What about for Blu-ray? Don't worry, neither one of those formats is on the verge of going belly-up, but that comes as little consolation to film studios and retailers who can do nothing but sit and watch as sales for these formats continue to slump.

According to The Digital Entertainment Group, both sales and rentals of DVDs and Blu-ray discs fell 7 percent to $10.9 billion so far in 2010, and according to the British Video Association, sales last year were down as well. Why the downfall?

The economy is certainly playing a role, but so too is the digital revolution. On-demand content is being piped through TVs, set-top boxes, game consoles, and even Blu-ray players, to name just a few. Even Netflix acknowledges that it's primarily a streaming service these days.

"There no doubt that the physical DVD market will be down this year," says Paul Dempsey, director of BBC Worldwide's Home Entertainment division. "There will still be collectors and gifters who want high-quality, beautifully packaged DVDs. What is more challenging for us is those consumers who used to come to DVD in distress because they missed an episode and had to wait for the DVD. Now they are being satisfied by great on-demand services like iPlayer."

Of course, there are always exceptions. James Cameron's Avatar sold 6 million copies in three weeks and is currently the No. 1 selling Blu-ray movie.