Home Video (VHS, DVD, Blu-ray, 4k)

In the latest Digital Media Entertainment Report, DEG has introduced the new metric Physical Product, a combination of two revenue streams it previously reported separately — DVD sales and rentals. Rentals lost more than 50% of the previous year’s total revenues in 2023 because of, according to DEG, Netflix’s decision to end its DVD rental service at the end of October.

Starting in the 2024 report, Physical Product will account for only DVD sales, with DVD rentals being completely phased out. This call was made just a few years after DEG demoted rentals from a dedicated category, with separate metrics for brick-and-mortar stores, kiosks and subscriptions, to just a single sum.

Physical Rentals’ impending departure raises questions about what’s going to happen to the lion’s share of the Physical Product figure in 2024 — the sales figure that didn’t erode too badly coming out of 2022 but is likely to shrivel this year as Best Buy stops stocking DVDs in stores. What’s worse, there are signs of more such retail departures.

DEG did not publish the exact split of Physical Product between sales and rentals, but rough estimates can be calculated based on the existing information. DVD rentals in 2022 were $502.35 million, so assuming the “more than 50%” decline in rentals from 2022 means roughly 55% of that number, that puts physical rentals revenue for 2023 around $225 million.

If you subtract that number from Physical Product (roughly $1.6 billion), that leaves 2023 physical DVD sales at around $1.36 billion — a 16% decline from 2022.

VIP+ projects 2024 will be the first year the DVD will be a sub-billion-dollar business. Truth be told, it could have very well crossed that benchmark this year had it not been for the successful Blu-ray release of “Oppenheimer” in the fourth quarter.

Archive (original, Variety VIP+)