More Proof DVDs Are a Dying Medium

While Hollywood pushes Blu-ray as the next-generation entertainment format of choice, new research suggests that it may be wasting its time peddling the optical disc format. In a research note to clients, BTIG Research analyst Richard Greenfield notes that Google searches for rental services such as Redbox and (especially) Netflix have skyrocketed and searches for DVDs have flat-lined.

Greenfield suspects that the rise in Netflix’s popularity has a lot to do with the rise in on-demand content, as consumers are no longer interested in ownership. If this is the case, it could spell trouble for Blu-ray: Hollywood is banking on the proposition that physical media still has a few years of life left.

Google Searches Predict the Future?

Searches for DVD terms such as “DVDs,” “movies on DVD,” “new DVD releases,” and “top DVD rentals” were off some 45 percent since their late-2008 peak, according to Google data. Contrast this with “Netflix,” whose query growth has eclipsed 90 percent in each of the past two years. Has the term Netflix become synonymous with home video, as Google has with search?

The entertainment service’s rise in search queries does match up pretty well with its recent, dramatic subscriber growth. However, the Google research paper that Greenfield cites in his report also notes that current subscribers themselves were increasingly using the term Netflix in their own searches.

If that’s the case, maybe my Google analogy isn’t that far off.

It’s Full Stream Ahead for Hollywood

Much of Netflix’s growth seems to be due to online streaming. Greenfield notes that numerous players are either solidifying or throwing their hats into the space–HBO’s GO service is a good example–which likely means that we’re in the early stages of a serious ramping up of interest in this format.

But let’s get back to Blu-ray and its prospects. Sales data shows that the format has only now reached a par with traditional DVD in player sales. While research group NPD says that about 77 percent of movie viewers still watch movies on DVD, streaming has become much more popular.

Match this against the growth in interest of Netflix (at least according to Google), and the company’s successful push to streaming content, and Hollywood has to be a little worried.