Best Buy Movie Downloads: Is the Death of the DVD Nigh?

The announcement that Best Buy is teaming with CinemaNow on movie downloads is yet another sign that DVDs are plummeting fast into a steep downward trajectory.

As my PC World colleague Daniel Ionescu pointed out today, Best Buy, the leading retail seller of DVD movies, is now seeing those sales fade away as more people move to renting movies through digital distribution.

Let's face facts here. DVDs can warp or get scratched, immediately making them unplayable. It's easy to lose a DVD -- and it might be hard to get one back after you've loaned it to a friend.

It often make less sense to buy a DVD than to rent one -- how many times are you really going to watch "Gone with the Wind" on DVD, or even the first six episodes of "Seinfeld"? Repeated trips to the DVD rental store can be a bit of a hassle, as well.

Now, the emergence of multimedia niceties such as Windows 7's Internet TV and home networking standards such as DLNA 1.5 are starting to make streaming video all the more appealing.

The DVD industry might have thought it found a savior in HD-DVDs. But after a vicious format battle, players based on the surviving protocol, Blu-ray, were selling for under $200 even back in January.

According to a Harris poll published in June of this year, more U.S. homes had a high-def player than the year before -- but still, adoption amounted to only 7 percent for Blu-ray and 11 percent for HD-DVD, a format that's already passé.

At the same time, almost half of U.S. consumers owned an HDTV in June, and the number is undoubtedly higher now.

Best Buy isn't the only hawker of multimedia entertainment to be shying away from physical DVDs. It was only last month that Netflix CEO Reed Hastings -- head of a company that rents movies on disk as well as through video streaming -- predicted in a podcast that disks may lose their number-one spot within the company's video distribution scheme after another two years.

Lots of Netflix subscribers are already switching to lower-priced plans that allow only one disk rental to be out at a time, but still provide unlimited streaming, Hastings pointed out.

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