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Last year was exceptionally rough for the DVD business, thanks to the one-two punch of Netflix ending its physical rental service and Best Buy ceasing all DVD sales. This month, the downward spiral is continuing with the news that Target is potentially taking its leave from physical media.
The trouble began on April 18, when the Twitter/X account “The President of Physical Media” received word from sources that Target will “reportedly will stop selling physical media in-store and online by 2025.”
After that post received some news coverage, the retail giant officially responded to the rumor on IGN, clarifying that it will be “transitioning the limited assortment of DVDs we carry in our stores to Target.com” while offering a smaller selection in the brick-and-mortars.
While the retail giant isn’t fully abandoning DVDs, it also didn’t confirm or deny the supposed 2025 end date. It’s also worth noting that customers have already noticed reduced DVD stock in stores as far back as last fall. Regardless, the move now leaves Walmart as the last retailer to stock DVDs regularly, but even it has shaved off floor space.
None of this should come as a surprise for those keeping an eye on the physical side of home entertainment. In February, Digital Entertainment Group stopped tracking DVD rentals as a separate income stream in its latest “Digital Media Entertainment Report,” opting instead to lump it with DVD sales as the new Physical Product category. Starting with this year’s report, Physical Product will account for only DVD sales, with rentals being completely phased out.
Note DEG didn’t officially release the split between sales and rentals within Physical Product, but VIP+ estimates that rentals brought in only $225 million in revenue for 2023. Looking at that number compared with the $37.1 billion from streaming subscriptions, it’s no shock that DEG isn’t even bothering to track disc rentals from now on.
With Target’s gradual bowing out, it seems more likely than ever that DVD sales will have a similar fate to rentals and become a sub-billion-dollar business. Such a reality also means that streaming — currently the only source of growth for the home entertainment industry by a wide margin — has even more power over what consumers watch.
Still, said consumers are willing to tolerate price hikes and navigate bundles for now, and the streaming business is also more oversaturated and volatile than ever. And it may not be wise for the home entertainment industry to increasingly put all its eggs — all 37 billion, in this case — in one basket.
The trouble began on April 18, when the Twitter/X account “The President of Physical Media” received word from sources that Target will “reportedly will stop selling physical media in-store and online by 2025.”
After that post received some news coverage, the retail giant officially responded to the rumor on IGN, clarifying that it will be “transitioning the limited assortment of DVDs we carry in our stores to Target.com” while offering a smaller selection in the brick-and-mortars.
While the retail giant isn’t fully abandoning DVDs, it also didn’t confirm or deny the supposed 2025 end date. It’s also worth noting that customers have already noticed reduced DVD stock in stores as far back as last fall. Regardless, the move now leaves Walmart as the last retailer to stock DVDs regularly, but even it has shaved off floor space.
None of this should come as a surprise for those keeping an eye on the physical side of home entertainment. In February, Digital Entertainment Group stopped tracking DVD rentals as a separate income stream in its latest “Digital Media Entertainment Report,” opting instead to lump it with DVD sales as the new Physical Product category. Starting with this year’s report, Physical Product will account for only DVD sales, with rentals being completely phased out.
Note DEG didn’t officially release the split between sales and rentals within Physical Product, but VIP+ estimates that rentals brought in only $225 million in revenue for 2023. Looking at that number compared with the $37.1 billion from streaming subscriptions, it’s no shock that DEG isn’t even bothering to track disc rentals from now on.
With Target’s gradual bowing out, it seems more likely than ever that DVD sales will have a similar fate to rentals and become a sub-billion-dollar business. Such a reality also means that streaming — currently the only source of growth for the home entertainment industry by a wide margin — has even more power over what consumers watch.
Still, said consumers are willing to tolerate price hikes and navigate bundles for now, and the streaming business is also more oversaturated and volatile than ever. And it may not be wise for the home entertainment industry to increasingly put all its eggs — all 37 billion, in this case — in one basket.