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DVD and Blu-Ray: Exit Slowly, Stage Left

May 11, 2012 | Author: Ibex Marketing

There was a time when DVDs enjoyed the fastest new technology adoption of all time. The transition from the clumsy, snowy VHS tapes to the sleek little polycarbonate discs was driven by the fact that the digital image looked terrific even on standard definition picture tube televisions. And they look even better on flat panel HDTVs; many people still think that they’re watching high-definition content when they watch a DVD on an HDTV.

But the cycles of rise and fall continue, and it looks as though the days of getting movies on plastic DVD and Blu-ray discs are numbered. My friend and colleague Peter Putman wrote a recent column that cites some sobering statistics. Physical disc rentals dropped 25% in the first half of 2012 compared with the first half of 2011. Kiosk rentals were up by 30%, but brick and mortar rentals fell 40% and subscription rentals fell 48%. (Now do you see why Netflix has been trying to get out of the business?) By comparison, streaming video subscriptions rose 545%. (I repeat; do you see why Netflix wants to get out of renting discs?)

Now, I know that there are few options that give you a way to stream high-quality HD content at this point, so all you afficianados do not need to write and tell me about how Blu-ray is way better than streamed video. We’re talking here about the mass market, and many consumers are perfectly happy with DVD quality on their televisions, so most streamed content falls into the “good enough” category. And I also believe that there will be more and more true HD content available to stream over the Internet as the subscriber base increases. (We’re also going to see new compression standards that should help keep the bandwidth requirements down for the higher resolutions.)

The take-away here is that DVD and Blu-ray discs are on the down side of the curve, and I don’t see anything on the horizon that might change that trend.