Updated on December 10, 2021
On Tuesday, The Verge reported that Fandango, owned by Comcast, will buy Vudu from Walmart for an undisclosed amount of money. The move is supposed to help Comcast compete better in the home video market against Amazon Video and iTunes.
While Fandango has its own digital video sales service (FandangoNOW), it doesn’t seem to match the popularity of Amazon or iTunes. It does serve as Roku’s default store, but that apparently isn’t helping.
Meanwhile, Vudu’s still fairly popular among home theater enthusiasts (for its high quality video options), is offered by a popular brick and mortar retailer (Walmart), and has branched out into offering a handful of free ad-supported videos.
But why should Comcast buy into digital video at all? Historically, it’s been streaming that’s gotten all the attention, with physical media easily eclipsing digital sales. However, that might be slowly changing.
Home video sales in 2019
Industry group DEG (Digital Entertainment Group) published its report (PDF) on home video sales for 2019. Below’s a summary of how each category did, with how much each category rose or dropped over 2018 in parentheses:
- Total: $25.2 billion
- Subscription streaming: $15.9 billion (+23.7%)
- DVD/Blu-Ray sales: $3.3 billion (-18.3%)
- Digital video sales (“electronic sell-thru”): $2.6 billion (+5.1%)
- Video on demand (VOD): $2.0 billion (-6.2%)
- Kiosks: $885 million (-19.4%)
- DVD/Blu-Ray subscriptions: $301 million (-18.4%)
- Brick-and-mortar rental: $250 million (-21.1%)
For those wondering, kiosks refer to DVD/Blu-Ray rental businesses like Redbox. Netflix’s still-in-existence disc rental service falls under the DVD/Blu-Ray subscriptions category. And of course, “brick-and-mortar rental” consists of traditional video rental stores, which are dwindling in number.
Of note is that the only growth areas over 2018 were in streaming services and digital video sales. Traditional DVD/Blu-Ray sales have declined by double digits, and now only top digital video sales by about $700 million. Meanwhile, video on demand (which Comcast and other cable companies have offered for years) also has declined. I assume it’s a consequence of the increase in cord cutting and streaming services.
Why the growth in digital video sales?
As for why the increase in digital video sales (versus my last look at such back in 2016), my guesses:
- Fewer people buying DVDs/Blu-Rays.
- The “confusing walled garden” aspect has been resolved somewhat, with the rise of Movies Anywhere allowing one’s digital purchases to be accessed from all the major digital video stores. Still with DRM, of course, but at least if one service goes under, it won’t take all your videos with it.
- The price of digital videos have dropped (somewhat) enough to be competitive with DVDs/Blu-Rays. Checking Amazon’s prices for several recent movies:
- “Sonic the Hedgehog” (2020): 4K: $28; Blu-Ray: $23; digital video: $20; DVD: $18
- “Frozen II”: 4K: $24.20; Blu-Ray: $24.90; digital video: $20; DVD: $20
- “Joker”: 4K: $20; digital video: $20; Blu-Ray: $15; DVD: $10
- “Fast and Furious Presents: Hobbs & Shaw”: 4K: $18; Blu-Ray: 13; digital video: $10; DVD: $10
So overall, Comcast’s purchase of Vudu seems to make sense. It also gives them a companion service to their new streaming service, Peacock.
Anthony Dean is the owner of Diverse Tech Geek and Diverse Media Notes.