Physical Media is (Nearly) Dead, Long Live Physical Media

May 11, 2009

dvdBack during the HD DVD/Blu-ray catfight, a common call among HD DVD supporters was that Blu-ray may win the battle but ultimately digital downloads would win the war. This was often countered with “I’ll never move to digital downloads, I want a physical copy of my purchase”.

As with many arguments the truth is often somewhere in the middle, in the time since Toshiba pulled the plug on HD DVD it’s become clear that Blu-ray may never achieve the total marketplace saturation of DVD. While Blu-Ray’s sales have indeed trended up recently, the steep mountain ahead is no less daunting, especially in the face of a recession.

Think of it this way, Blu-ray was launched in November (ostensibly) 2006, the “format war” ended over a year ago and it’s almost impossible to even find a standard definition television on many store shelves, and Blu-ray hovers around a 10% market share against DVD. Significant ground has been covered but the race is far from over.

That doesn’t mean that Blu-ray won’t go on to eventually become the disc du jour, however I’m seeing a coexistence between Blu-ray and non-traditional formats (in the short term) becoming more likely; with non-traditional formats (read digital downloads) eventually leaving physical media a moot point with greater convenience, selection and portability.

Take a step back and remove yourself from the argument for a second and it’s pretty clear that convenience is king, MP3’s have all but relegated the CD to yesterday’s tech from a convenience standpoint. Any argument that other forms of physical media won’t take the same route as CD aren’t based in historical evidence. The cassette eventually trumped the 8-track, the CD eventually replaced the cassette and MP3’s eventually outgrew CD’s in overall popularity and portability.

Time Marches On: It seems like nearly a day doesn’t go by without hearing of some new streaming video service launch, studio partnership, or digital download milestone that has been reached. Some companies are even using an included “digital copy” as a bonus to move more Blu-ray discs.

Hey folks, there’s even a high-end product aimed at the enthusiast that disposes with traditional media. The writing is on the wall… we can ignore it if we want but it doesn’t change the simple truth that Blu-ray may very well be the last major physical media format we see.

Add to that the bevy of other HD video on demand/downloading services from Xbox Live and the Playstation Store, Joost, Cinemalink and Hulu, and its easy to see just how fractured the overall video market is. Speaking of Hulu…

Hulu: An evil plot to destroy the world. Enjoy: Hulu’s success only goes to illustrate this point. Hulu went from a desktop app for sneaking in a few BSG episodes at work to part of our collective consciousness in a little less than a year. With Disney “looking to broaden its revenue sources for studio titles as well as its broadcasting division by expanding the number of Web sites offering digital distribution of its movies and television shows.” That new 27% stake in Hulu further demonstrates the fact that traditional media companies are looking past little shiny discs.

And if that wasn’t enough, streaming content has one advantage that no disc based system can ever replicate, it can be embedded in the same printed circuit board as the rest of a televisions inner-workings for less than a few dollars. I may be over estimating that, I’ve heard of SOC solutions eventually costing pennies in the long run.

The latest craze is net-connected televisions with programming from the likes of Amazon UnBox, YouTube, Bloomburg News, The Weather Channel, etc. via Panasonic’s “Viera Cast” feature but Panasonic’s not alone. Sony, Samsung, and HP have all trialed sets with some form of internet connectivity. CEA research indicates that as many as 14.5 million net-connected televisions may be sold this year, while In-Stat research suggests another 24 million net-connected televisions in the next five years.

Not necessarily looking forward to it (yet): But before you take my tone here to infer I look forward to electronic delivery replacing physical media, I don’t. I’m simply taking an objective look at the writing on the wall. There are however some benefits to digital delivery and of course some downsides. One obvious benefit to digital delivery would be the cloud effect of watch it anywhere, anytime without ever having to store or locate the disc on a shelf.

From there we get into things like increased competition driving prices down (there are only a handful of players in the market at the moment), increased selection including classic catalog films, and hopefully better soundtracks and extras.

The downside is the obvious lack of a physical copy that can’t be revoked for any reason, potentially inferior image quality (although that one should be easy to fix), and then the bandwidth considerations; although in all honesty we should be well on our way to fixing bandwidth limitations.

You’ll have to forgive the semi tongue-in-cheek post title. By nearly dead I don’t mean this year or even in the next decade, but I do believe the market has been irrevocably changed and physical media undoubtedly has less time ahead of it than behind.

How much time? It’s hard to say but one thing’s for sure the market will bear that out and as long as the demand is there, physical media will remain. The pressure will be on the studios to come up with new and valuable reasons for us to switch. The end result is a win and most certainly not a loss for the consumer.



Posted by Bryan Greenway | | Filed Under Blu-ray, HTPC, Media Servers


Comments

  • mungabba

    Prophetic. Oliver Stone said at CES 2011 that Blu-Ray will most likely to be the last physical media for movie watching and I am inclined to agree with him. However, I for one will always be a fan of physical media, namely CD’s and Blu-Rays. There is something very satisfying about holding a tactile item in your hand, looking across a shelf of titles neatly rowed and stored. Removing disc from the case, the colours of the disc shimmering in the light. Opening the disc tray, or sliding it in and hearing the mechanical process of gears and belts spinning.

    Before the internal combustion engine horses were used by almost for work and travel. Once the car arrived horses were replaced and we’ve never looked back. Horses didn’t become extinct. They’re just used in different ways now. Perhaps, physical media will be enjoyed in the same way in 2050.

  • mungabba

    Prophetic. Oliver Stone said at CES 2011 that Blu-Ray will most likely to be the last physical media for movie watching and I am inclined to agree with him. However, I for one will always be a fan of physical media, namely CD’s and Blu-Rays. There is something very satisfying about holding a tactile item in your hand, looking across a shelf of titles neatly rowed and stored. Removing disc from the case, the colours of the disc shimmering in the light. Opening the disc tray, or sliding it in and hearing the mechanical process of gears and belts spinning.

    Before the internal combustion engine horses were used by almost for work and travel. Once the car arrived horses were replaced and we’ve never looked back. Horses didn’t become extinct. They’re just used in different ways now. Perhaps, physical media will be enjoyed in the same way in 2050.