Are DVDs Going, Gone, Gone?

Today's Guardian reports that the DVD industry is in crisis as sales of disks slump while consumers turn to on-demand viewing and downloads to networked devices such as iPads, iPods, video game consoles and other gadgets.

Just a few years ago, the DVD industry was extremely worried about piracy. Yet much of the download/on-demand entertainment viewing is paid, not free or pirated.

Despite the downward trend in sales, DVD rental sites such as LoveFilm and Tesco DVD Rental continue to attract customers in part because of the flexibility of delivery they offer. And stand-alone rental kiosks have some appeal, capturing impulse customers who want to take a DVD home for the day.

In the US, Netflix (see above) is a major market leader that has transformed the DVD rental industry and is using pricing to encourage online viewing rather than by-mail rentals. Recently it raised its by-mail subscription prices and introduced a budget-priced instant-viewing subscription option that will help the firm cut postal and delivery costs.

However, the outlook for DVD sales isn't entirely bleak. Videogames are a bright spot. All in all, reports of the DVD's demise are premature.