DVD’s Slumping?

USA Today is reporting that DVD media sales have declined for the first time since the format was introduced. Truthfully I am a little bit puzzled considering the plethora of system bases that use DVD’s — software, games, movies, etc. But with everything going into the Cloud it makes sense that the DVD is not immune to the shift –

Total sales and rentals of DVDs amounted to $23.4 billion in 2007, about 3% lower than in 2006, according to industry figures that the Digital Entertainment Group will release today at the Consumer Electronics Show in Las Vegas.

The largest factor in the dip? Economic hurdles that challenged the home-video industry just as it did other businesses, says Amy Jo Smith, the group’s president. “Consumers have less disposable income, but they still choose to buy and rent DVDs,” she says.

Consumers spent $16 billion buying DVDs, about $600 million less than in 2006. But rentals matched last year’s total of $7.5 billion.

Hollywood shipped 1.7 billion discs — about 30 million more than in 2006 — a sign that DVD remains strong, Smith says. “There is a natural progression to lower price points due to the maturing market,” she says. “But there are still titles — big blockbuster releases, collector sets and, mostly, TV DVD compilations — that are generating high price points.”

The average selling price of a DVD dropped 0.5% to $14.63.

Despite the downturn in DVD sales, the $23.7 billion total spending on home video dwarfs Hollywood’s $9.6 billion box-office total for 2007.

USAToday article.