Only 64 per cent of the movie and TV market in the US last year was spent on physical DVDs and Blu-rays.
That’s down from the 96 per cent share physical formats claimed in 2004, IHS Technology reports.
While spending on movies and TV shows in the home entertainment market actually grew one per cent year-on-year, sales of discs fell from $8.2bn in 2012 to $7.5bn in 2013. DVDs declined 13.6 per cent and Blu-ray grew 2.6 per cent.
Movie and TV disc rentals fell nine per cent to $4.3bn. Pay-TV rentals grew by one per cent.
Internet sales grew 39 per cent, however, with rentals jumping 39 per cent and subscriptions jumping 31 per cent, meaning digital now claims more than one third of the US home entertainment market.
“During the heyday of DVD, the widespread availability of cheap discs allowed most consumers to build enormous video libraries,” senior HIS analyst Michael Arrington stated. “Now consumers have become more discriminating in their purchases.
“And with the rise of iTunes and other online sources, it’s pretty much an equal choice for buyers whether they want to purchase a video title on disc, or download it from the Internet. Under these circumstances, an increasing number of consumers are choosing the download option.
"Unless Blu-ray Disc prices stabilise and box-office performance stays high, as it might with sequels to The Avengers and The Hunger Games on the table, another year of Blu-ray unit growth that is slight at best could yield a downward turn in spending for the format in 2014.
“In any case, any reasonable amount of growth in Blu-ray is unlikely to prevent what will next year become a decade of decline for a once-thriving disc market.”