Where Did the Lost DVD Buyers Go?

As important as DVDs have been, and remain, as a key part of the movie revenue ecosystem, studios no longer make as much from DVDs as they used to.

U.S. consumer spending on DVDs is down about 20 percent in 2010 from 2009, to $7.8 billion, according to media-tracking firm IHS Screen Digest. DVD spending is down 43 percent from its 2006 peak of $13.7 billion.

At the same time, consumer spending on video-on-demand services rose 17 percent in 2010 from 2009, to $1.4 billion, according to IHS. So that leaves a gap of up to $4.5 billion that simply seems to have disappeared.

One would have to conclude that consumers have found other ways to spend that money. Netflix could not have gotten it all. Netflix annual revenue might be somewhere in the $1.7 billion range.

First-Run Movies at Home—for $20,000 - WSJ.com (subscription required)