If the Majority of Americans Still Own VCRs, What’s Is Future of Disc and Digital?

As 2014 begins and the home entertainment and media world continues to evolve, it’s interesting to note exactly where we, as an industry, have been and take a peek ahead to where we’re likely headed.

Courtesy of NBCnews.com

Courtesy of NBCnews.com

Our roadmap? A December, 2013 Gallup poll which NBCnews.com published for a story about potential 4K TVs. (Forget 4K TVs: Most Americans still own a VCR). NBC pulled the most surprising data point for its headline, the fact that a majority of Americans still own a VCR, but the poll also provides several other insights worth considering. The Future of Disc-based Media: Note that in the 8 years since the last similar poll was conducted, the market penetration for DVD/Blu-ray players has dropped by 3%, from 83 to 80%. This would seem to follow from the general decline of disc-based media in the marketplace. Even with stellar Blu-ray (and DVD) sales for Christmas, 2013, it’s a generally acknowledged fact that discs are being replaced, as an entertainment delivery vehicle, by streaming media. The absolute number itself (80%) is a bit suspect. We’ve seen estimates of DVD player market penetration as high as 91%, as this Home Media Magazine article points out. Nevertheless, the TREND, real or perceived, is what’s interesting here. Fewer households are depending on discs for their home-based entertainment. Where is the Future? It’s in digital media, whether that’s streamed into a home via a VOD service, which didn’t exist 8 years ago, but now 39% of people use them, or via a mobile device like a smartphone (didn’t exist to 62%) or a tablet (didn’t exist to 38%). (Interesting trivia: The iPhone was announced at the MacWorld convention seven years ago today, January 9, 2007, debuting six months later, June 29, 2007.)) Yet the key data point that NBC chose to bring to the fore, the fact that a majority of people still own a VCR also tells us something about where the future lies, particularly concerning optical media players. The last eight years have cut the market penetration for VCR players by a third; this would seem to result more from new consumers not adopted the aged technology than current users discarding it. The same poll shows that older Americans own VCRs at a much higher proportion than younger Americans, as the chart below shows.
Courtesy NBCnews.com

Courtesy NBCnews.com

If you’re 65 or older, 3 out of four of your peers own a VCR. Among your grandchildren, only 2 in 5. Alternately, the grandchildren have accepted mobile technology in far greater numbers than their elders; nearly 9 in 10 own a smartphone compared to only 1 in 4 of the older generation. This is closely mirrored by the uptake in the streaming services, with 3 in 5 grandchildren using streaming media, while fewer than 1 in 6 grandparents do the same. The young folks are digital citizens; their elders still like the physical product. So what does that mean for DVD players? While the younger generation will be far more likely to view their entertainment via streaming solutions like Netflix, Hulu, FlixFling, PopcornFlix, or any of a number of upstart services, the future lifespan of optical media can still be measured in decades. There’s an argument that optical media may even prove stickier and longer lasting than tapes. As anyone with an extensive VHS or beta collection from the 1980s and 90s can attest, tapes degrade over time and begin to show significant magnetic transference in ten to fifteen years, with greater degradation occurring thereafter, even in the most ideal conditions. Since VHS ceased to be a viable consumer product for studios in the early 2000s, we can expect that VHS libraries to degrade into unwatchability in the next 10 years. DVD and Blu-ray, on the other hand, do not suffer the same fate since they are optical, rather than magnetic technology. As the first digital format, they can be relied upon to present the same crisp image decades after manufacturing. As American VCR owners and VHS libraries age, they will naturally fade away. It’s not a far reach to guess that the next 8 years will see an even sharper decline in market penetration for VCRs. I’d even hazard a guess that by 2020, fewer than 20% of Americans will own a VCR. Discs, however, due to both the longevity of the discs themselves (estimated to be 100+ years) and the relative youth of their users, will be around for decades to come and will continue to provide a business opportunity for savvy content owners. The Entertainment Medium of the Future: What will the entertainment medium of the future be? Disc AND digital, without a doubt. Distributors will be smart to keep an interest in both mediums, allowing the greatest exposure to a technologically diverse consumer base. More viewers will be viewing on mobile devices; more than 53% believe that mobile and tablets will replace televisions (and disc-based playback) by 2022. Yet there will still be a place for discs in this bright future. Consumers will want them and we, as an industry, would be foolish not to be where our audience wants to be. In this, it’s their home theaters with surround sound, large screens and a place to put their feet up.