Worldwide video on demand (VOD) rentals from over the top (OTT) and pay TV operators, electronic sell-through (EST), and DVD or Blu-ray disc sales are expected to increase by 40 percent from 2013 to 2019 -- growing from $30.6 billion in 2013 to over $43 billion by 2019.
Physical media sales will continue its decline, while OTT VOD services and ad-based viewing take significant market share from combined physical purchases and EST, according to the latest market study by ABI Research.
"New content windowing strategies, such as early VOD and EST release dates, will continue to push consumers to these distribution channels. In addition as pay-TV operators increasingly pursue OTT initiatives the consumers will further migrate to digital distribution," said Michael Inouye, senior analyst at ABI Research.
Despite this trend, physical media will continue to play a significant role for many consumers, particularly for those who have extensive DVD or Blu-ray libraries, purchase 4K TVs and want higher quality video than HD streaming services, or simply prefer having a copy in hand.
In fact, traditional media -- more broadly speaking -- still has plenty of resiliency left and in some cases a large amount of control over the content.
As consumers move to digital distribution the wildcard in this transition remains the pay TV operators who, for the time being, still hold the most bargaining power for content rights.
According to ABI's assessment, how these operators approach multi-screen services will dictate how well these players retain control over when, where, and how consumers watch video.
Recent activity in OTT services and content purchases from operators like AT&T, Verizon, and Dish offer a glimpse into how these video entertainment incumbents are working to move with consumers as viewing behavior changes.