For decades, retail sales of movies have been Hollywood's second-chance income stream for movies. Box office sales numbers are typically footnoted by home video sales — it's often hoped that a box-office failure becomes a success when its DVD (or Blu-Ray) is is ultimately sold at retailers like Best Buy ($BBY).
David Fincher's Fight Club, for instance, was a box-office flop in 1999. The movie made just $37 million at the US box office despite its $67 million budget. When it was released on DVD, it became a perennial best-seller and beloved critical success.
Similarly, cult favorite Donnie Darko pulled just over $500,000 at the box office but turned into a $10 million DVD sensation.
There's no doubt that people love watching movies at home, and for decades they did so via VHS, DVD, Blu-Ray, and now UHD. But sales of physical movies have been declining since 2016 as enthusiasts turn to digital streaming, buying or renting their movies on their Smart TVs and streaming devices like AppleTV ($AAPL) and Amazon Fire ($AMZN).
When averaging the sales ranks for hundreds of thousands of DVDs sold at Best Buy since 2016, a very clear — yet gradual — downtrend is revealed.
While this isn't an entirely surprising trend — sales of DVD players have dipped as well — it does appear we are witnessing the end days for cinema's physical media. Gone will be the days of browsing bookshelves of movies on movie night. The days of heading to the video store to rent a movie are already behind us, so it seems plausible that heading to a store (or e-commerce site) to grab the latest DVD would follow soon behind.
Blu-Ray DVDs, the high-definition successors to the DVD, are seeing a similar trend.
The latest physical movie format, 4K UHD Blu-Ray, is by most indicators the final hope for retail sales. And, despite its superior video and audio quality, it is also seeing sinking sales ranks at Best Buy. It's hard to compete with the convenience of digital streaming, and as broadband speeds increase, streaming quality is on the rise. 4K streaming is now possible, along with high-definition audio formats that make watching the latest movies in the latest formats almost indistinguishable from discs.
It's important to note this also signals a looming end to physical media sales — and its associated revenue — for Best Buy, a store that once dedicated a large percentage of its floor space to movies, music, videogames, and software.
The end isn't here just yet, but the data trends are certainly pointing in its direction.
