Whoa, vaquero -- calm your jets. This is just a
projection, which may or may not prove to be indicative of reality. That said, there's still quite a lot here to discuss, particularly since we've been hearing so much
hubbub over the supposed explosion of
digital distribution. Media Control GfK International has forecast that sales of Blu-ray Discs will increase some 150 percent to $2.9 billion, up from $1.1 billion in 2008. For those
keeping count, digital distribution only generated $1.5 billion last year, and that's including every penny made from VOD and broadband services. In-Stat analyst Michael Paxton was quoted as saying that the "bandwidth required to stream any type of HD video is way beyond what most households have," and he continued by noting that the "convenience factor is
still not there for streaming media." You owe it to yourself to hit up the read link for the full report before blasting your opinion in comments below, but we suppose we can't stop you either way.
posted Feb 2nd 2009 12:43AM
Okay.. even though I'm a big cheerer of digital downloads just on account of convenience and a few other things but in general I'm no Blu-ray hater either, I have to agree with the notion that digital downloads won't replace optical media any time soon as well. The future we are looking at will be mixed. DVD will remain the king for a long time, in the mean time Blu-Ray will hold the top end of HD market with minor marketshare for at least next couple of years, but we will see a sharp rise among online services and digital downloads as well, so those who can will take full advantage of streaming and download services while those who can't will remain with the DVD and Blu-ray. The interesting player in the market is the initiative for memory cards. The big players are already joining up and it will be another stream of content (probably SD first, then later HD).
The real question here would be whether or not digital downloads will dominate Blu-ray's market share and I would have to say most likely yes. Even though digital downloads won't be able to take on DVD, just like we have CDs today still, digital downloads will eventually outpace the Blu-ray marketshare IMO. With the adoption rate in the article and best case estimates by 2010, Blu-ray's market share will be 11%. This tells me that there's a lot of room for digital downloads to grow and take over.
The revenue by itself is not a measurement of success. I disagree with some analysts commenting that costs of streaming are rising. The fact is that companies behind Blu-ray, mainly Sony as one of the key players have lost a lot of money to push the standard. First with format war against HD DVD, then on hardware production and replication costs and so on. Sony alone probably lost billions in marketing dollars and PS3 decline and one of the reasons could be attributed to Blu-ray. In comparison, digital downloads 11 million quoted by someone in the article that Netflix invested is really just a drop in the sea.
I don't see how digital downloads will increase costs, sure they are losing some money in the beginning but with more and more users joining up, it's obvious that number of subscribers to the service will outweigh server costs generating positive revenue much faster then Blu-ray did or will. As I mentioned above, revenue by itself when compared to Blu-ray is irrelevant simply because most people pay fixed subscription to Netflix or utilize rentals that cost much less then sales of optical media that carries other replication and packaging costs. As some analysts mentioned in the article state, the Blu-ray PR numbers shown in revenue are obviously misleading because you can't look at the individual unit revenue as growth. Unlike Blu-ray, digital download services have capability to reach much bigger number of homes in shorter time then Blu-ray ever will.
Bottom line is, I can definitely see digital downloads expanding much much faster then Blu-ray because you will either only need an extenders already present in consoles, computers and so on then buying new players and discs.
Why does one have to kill the other? Why not have both?
Whether you like it or not blu-ray isn't going anywhere, and neither is digital distribution IMO.
Put it this way if they just stopped making laser disks in the last few weeks/months, I'd say it's safe to think that blu-ray is going to just simply die off anytime soon. Plus you really have to love competition since we win with better prices and selection from both!!
There are multiple problems with digital distribution holding it back. The biggest one is there isn't any standard for digital delivery. The industry could do itself a big favour by defining a single common specification for delivery, encryption, rights management, file format, audio/video codecs, bitrates, resolutions etc. and opening it up so any hardware manufacturer or vendor can sell titles in that format. THAT might get the concept going.
Anyone who actually buys a digital movie to own in the current climate of proprietary devices tied to a single store with no means to freely shift their content really needs their head examined. Digital distribution is only suitable for rental or a subscription service while every solution is proprietary and so heavily restricted.
"The industry could do itself a big favour by defining a single common specification for delivery, encryption, rights management, file format, audio/video codecs, bitrates, resolutions etc. and opening it up so any hardware manufacturer or vendor can sell titles in that format."
What? And lose the ability to to take their toys and go home? Never! :-P
These companies are really all so damn myopic. Apple, Comcast, Amazon, Vudu, Microsoft are all fighting to keep their toys to themselves and in the process they are holding back the digital content industry as a whole. Instead of carefully grooming their little walled gardens they need to cooperate on the a real digital distribution format that would allow them all to build huge kingdoms.
Blu-ray, like it or not, is a real format that is not tied down to any one company's hardware and that is its greatest selling point to anyone who is interested in buying content. DVD is the same as is the mp3. Real formats require the cooperation of competitors for the greater good. Because consumers like consistency and reliability and if they don;t get it they just wait on the sidelines. Aside from early adopting gadget lovers who really wants to be caught in the middle of all this overpriced, locked down, DRM infested nonsense?
Take off the DRM, give us good quality at a reasonable price in an industry-wide format that will works on pretty much all devices and they would see digital distrinution skyrocket.... you know sort of like it did for music after they fought it for 10 years. Its really sad that we have to go through this painful process with these companies again before they learn their lesson.
"bandwidth required to stream any type of HD video is way beyond what most households have,"
Well, I'd guess even less households have blu ray players. As for a convenience factor, I currently wait 1-2 days for my Blu and SD disks to come through Netflix, so any similar model would be fine with me (like downloading the movies while I'm at work).
My first BR player is in my HP HDX16, which is great...when it plays. Tried watching Babylon AD (I'm a glutton for punishment), and the previews were fine, but the movie was pixelated. Guess what? No new updates for my player meant that I was stuck with alternative methods for clearing up the decryption. I doubt 'most households' would go to those lengths, being much happier with the model they've seen before with on-demand movies.
The big fail for BR, if it happens, will stem from the constant updates needed. Yeah, it's fine for techies, but a nuisance for everyone else, who just want the dang disc to play.
Won't most households have a stand-alone player or a console like PS3? Connect an ethernet cable and once in a while it will pop up and ask you to install an upgrade. In my household I have had 4 BD players (not counting PC drives) and all had ethernet upgrade possibility.
I remember back when DVD came and I got my first player - There too was alot of upgrades for specific discs, but Joe Sixpack never found out because most bugs was fixed after a few years. Back then no players had a ethernet port. All updates was by downloading a .ISO file, burn a CD and then run the update.
And constant updates? There has been one update for my Panasonic players since I got it.
he continued by noting that the "convenience factor is still not there for streaming media."
I agree. It's so hard to open up a browser window, hit the add to my queue or watch now buttons. I mean who would want to do that when they either drive to a big box store and buy a blu-ray disc, or pop down to a blockbuster and rent their 4th or 5th choice movie on blu because there aren't enough on the shelf, take the movie home, pop it into their blu-ray player and then get an error because they need a firmware update.
If bandwidth isn't going to get any better, then the streaming folks need to put their thinking caps on and figure out how to cram more information into the same stream.
"pop it into their blu-ray player and then get an error because they need a firmware update."
Do you even own a Blu-ray player and have you actually experienced this? I have had Blu-ray since the day PS3 was released and I have yet to experience this - Neither on my PS3 or my stand-alone players.
I have actually have had far more firmware updates for my HD-DVD stand-alone player then for my Blu-ray players.
Thomas, the fact that it didn't happen to you doesn't mean it's not there. I've had to upgrade my BLu-ray standalone twice because of few new Blu-ray titles as they wouldn't play.
If it wasn't often as you claim the studios wouldn't put a notice at the beginning of each disc to wait a few minutes and if the disc doesn't load to update firmware.
Considering the fact that many cheaper Blu-ray player don't have network connection as the format didn't require it, the convenience issue is very much at play. So, if the consumer doesn't have internet connected to the player or the player itself doesn't have ethernet port, the consumer needs to locate the proper firmware online, download it, burn it to disc, then go to a player and go through a few steps there to get the player updated. 99.99% of consumer simply won't be capable of doing this or understanding fully what to do, not to mention afraid.
So, not much of a convenience now?
I don't understand people arguing that internet based services such as downloads or whatever in this way is "inconvenient". I"m really questioning the reasoning and logic of these people, out of pure desire for one format to win, the nonsense is present in such numbers that it boggles the mind really.
Erm - netflix is OK for the states, but there simply isn't anything approaching usable for the rest of the world. With expected price rises around the corner, it sounds like Netflix is having problems too...
Well my BD player hace certainly not rejected anything (BD or DVD) that I have thrown at it. Okay, it's a reasonably late model. The fact that early adopters had to update the firmware doesn't mean that this will be the standard for all time to come after all.
I almost never go to a store "only" to pick up a film. I get it while having some other buissness or I simply order ot over Internet. Then it goes into the shelf and I walk the few meters to my library when I feel like watching something and I'm guaranteed that it's going to be full HD quality (including sound) and not throttled down just because the load on the provider happens to be high. And I (or my kids) whats it as many times and as often as I/they feel like.
So yes, for me personally, BD or DVD is much more convenient. However, I guess what's convenient for one person may not be so for another person.
While I appreciate Digital Downloads convenience for rental/pay-per-view movies they will never replace Blu-Rays in my household.
Too many times we've seen digital distribution systems fail (financially and physically) and people lose all of their content.
No thank you. Physical Disc for me.