Online Streaming Hasn't Made DVDs Obsolete—Yet

Harry Campbell

Long ago, before Netflix, Hulu and Amazon Prime, gadgets called VCRs roamed the earth. Do you remember? They were rectangular boxes that plugged into televisions, and if a videocassette (a smaller rectangular box that contained long spools of film) was inserted into a slot on the player's front, a film would begin playing on your set—that is, as long as whoever watched it last was kind enough to rewind. Most VCRs now sit on the dusty bottom shelves of thrift stores or are buried in garages, because someone figured out how to put movies onto shining, reflective discs called DVDs, and then we all bought flat, rectangular boxes for playing them.

Thanks to online streaming, DVD players may soon join VCRs on those thrift store shelves, according to a new report from research firm Strategy Analytics. The amount of money consumers have been spending on DVDs has been declining steadily for the past 10 years. In 2016, consumers are expected to spend 7 and 10 percent less on DVD sales and rentals, respectively, than they did in 2015. It's kind of like when young people notice that their aging parents are acting like their grandparents.

But just because Dad loses track of his keys a little more often than he used to doesn't mean you should reserve a room in the retirement home just yet. American consumers are still projected to spend $8.42 billion on DVD sales and rentals in 2016, versus $6.62 billion on video-streaming services. Tech-savvy Americans who cut the cord long ago may have a hard time believing DVDs still reign supreme, but there are plenty of Americans who haven't embraced on-demand streaming. For those who weren't weaned on the internet, the suddenly rapid progression of entertainment technology can be hard to grasp. But despite DVDs' current lead, projected 2016 streaming revenue is up 22 percent just from 2015.

While that revenue increase is less than the streaming industry saw in 2015—the first year that growth has slowed—it's mostly a testament to how staggering the growth was in the first place. The market for streaming video may have reached a saturation level, but it will continue to expand and sales will continue to increase. At least for 2016, though, plenty of American families are still dropping those shining, reflective discs into their DVD players. Now, to figure out which of their TV's AUX channels will play the movie...