After 2005, with DVD sales down, the end of the format was predicted. Downloading was all the rage and it was believed we might be seeing the end of packaged media.

According to The Hollywood Reporter, even with the proliferation of digital offerings, the rollout of HD-DVD and Blu-ray DVDs, nothing really changed that drastically. The biggest change seemed to be in the amount of offerings (ie. mobil content and the ability to have what you want whenever you want it).

As Stephen Einhorn New Line Home Entertainment president said, "At the end of the day, home entertainment is still a new release-driven business."

Sony Pictures Home Entertainment President David Bishop had this to say, "What we're looking at is a market that is up slightly from last year, overall, but if you break down the components, we're projecting DVD sales to be up 3%, year-over-year, and rental to be up about 12%. What drags the industry down to a flat or slightly up basis is that VHS sales and rentals are virtually going away."

Making many studio executives smile is the fact that the 4th Quarter was so strong. Titles like X-Men 3: The Last Stand, The Little Mermaid Platinum Edition and Pirates of the Caribbean: Dead Man's Chest set new records for DVD sales and rentals.

"A couple of interesting things happened in the fourth quarter," states Ron Sanders, Warner Home Video president. "You had some very strong theatricals that performed very well across the board, and you also had the additional benefit of TV-DVD continuing to have a huge upside, year-over-year. All of this pointed to a very healthy category."

It seems with the next generation formats not getting anybody's blood boiling, downloads would have found a way to fill that niche. Sadly, "downloaded movies could not be burned to standard DVDs for easy transport into the living room."

"We determined that there is consumer interest in the ability to download content digitally," Sanders went on to say. "What is unclear is how big the economic potential is and what platforms will ultimately win out. But every studio wants to place a lot of bets, so we are leading consumer trends instead of following them, as the music industry did."

There were even more changes as "major shifts took place on the content distribution side, with the MGM library moving to 20th Century Fox, DreamWorks transferring over to Paramount, and brothers Bob and Harvey Weinstein tapping Genius Products to distribute content from their film studio, the Weinstein Co. The brothers subsequently bought a 70% interest in Genius."

Still, 2006 was seen as a year that the next generation formats established themselves and that the infrastructure of downloading was put in place.

"The great story coming out of 2006 is that despite the drag of VHS, DVD still kept us flat for the year," Sanders stated. "And when you look at 2007, when you factor in no VHS drag with the upside of high definition, you have nothing but great prospects for the year. When you look at the lineup of summer theatricals -- sequels to Harry Potter, Spider-Man, Pirates of the Caribbean, Shrek 3 -- it's the biggest summer in memory. So for home entertainment, I think it's going to be a massive 2007."

Dont't forget to also check out: X-Men: The Last Stand