Blockbuster Closing

In the least surprising news of the day, physical disc rentals dropped 17% in total over the last year, but still account for almost 62% of the total rental market. This according to Variety, which also points out that rentals overall are down a full 10% while digital rentals are up 5%.

The decline of physical discs in favor of digital and streaming services is right on track. The only question is how low physical rentals can go before they reach a plateau of use and how quickly or slowly it will take them to get there. According to the OECD (Organization for Economic Co-operation and Development), in 2010 68% of households in the US had broadband internet which is a major factor in the switch from reliance on discs to digital.

Exactly zero of this is shocking. We’ve watched the real toll that mismanagement and a crippling paradigm shift took on the rental business, and even though kiosks saw profits grow 23$ to $990m and full rental stores saw them drop 33% to $598m, kiosks have their own expiration date to worry about. It may come in 5 years or 10 or 20, but if digital continues to grow in popularity, physical discs will soon be relegated to a niche of collectors, nostalgia fans and those who still don’t have high speed internet.

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