So it turns out that people really like watching movies and TV shows from the comfort of their own homes. The appeal of binging a show or watching a movie while rocking your crumb-covered pjs is a powerful one. There is a smorgasbord of home entertainment options available to American consumers today. There is more content than ever and we can't seem to get enough, shelling out our hard-earned cash for all that scripted goodness. Thanks to the love for and growing ubiquity of streaming services, home entertainment spending rose in 5% in 2017 to a whopping $20.5 billion.
Citing a year-end report by the Digital Entertainment Group, Deadline reports that spending on subscription video on demand services like Netflix, Hulu and Amazon Prime rose 31% in a year, reaching $9.5 billion in 2017. See, those $10 a month subscriptions really add up. That is a huge increase that reflects the public's enthusiasm for the unlimited on-demand content that streaming services offer. I'd also be curious to see how this number tracks with more people cutting the cord and opting for services like Netflix to satisfy their home entertainment needs in lieu of cable. While subscription video on-demand services led the charge, that wasn't the only category that saw a bump last year. Paid movie downloads, known as electronic sell-through, also saw an increase of 6% in 2017 to reach $2.2 billion. So clearly people are willing to pay for a movie outright when it isn't included in a streaming service's on demand catalog. Combined, total digital sales rose almost 20% last year over 2016.
Increasingly, more and more people are housing their home entertainment on hard drives and in the cloud. So while physical formats are not gone yet, their superior quality will not save them. DVDs are still in decline, falling 14% last year to $4.7 billion. Notably, rentals are also down across the board, with fewer people opting for kiosks like RedBox and the storied video rental store for their home entertainment needs. I'm just surprised that enough of video rental stores exist to even merit tracking. In less surprising news, in addition to being the reigning, defending box office champ, Disney also dominated the home entertainment market as well. Five of the top ten best selling titles of 2017 came from the house that Mickey built. Disney's dominance of video purchases bodes well for its streaming service, which is due in 2019. I fully expect that Netflix rival to account for another jump in home entertainment spending when it arrives.
The home entertainment industry will continue to shift as more people use streaming services as their primary entertainment provider. For better or worse I feel that physical formats and cable are becoming increasingly antiquated and unable to adapt to consumer perceptions of value and convenience. This is only the beginning, too, with all kinds of different streaming options becoming available to cater to every taste. As time goes on, I think that physical formats and rentals will continue to decline as consumers come to expect the abundance of choice and value that streaming services offer. To get a taste of what's hitting Netflix this year, check out our release schedule, and for those of you who still prefer something you can hold in your hand, take a look at all the DVDs you can pick up this month.