I’ve had a number of conversations in the last several days wherein the client (or neighbor or family member) asks for my thoughts on the future of DVD. With all the talk about how Blu-ray is on the rise and how digital distribution is the solution of tomorrow, consumers and businesses are nevertheless interested in getting a little insight into (and perhaps the jump on) the future. This is topic I’ve touched on before here in this blog, but it seems to be a perennial favorite and certainly clients who see significant revenue from DVD are concerned that one of their chief profit centers is being threatened.
Some have speculated that the home entertainment industry is headed in the same direction as the music industry. It’s no secret that CD sales have fallen off a cliff and are now only just scraping together a 1 to 2% year-over-year increase in the face of strong headwinds from the digital marketplaces. However, it’s inaccurate to look at the troubles of the music industry and extrapolate the future of the home video business. Although both music and movies can both be broadly categorized as ‘entertainment’, the way in which people use each of them is different enough that I don’t think the studios have as much to fear from the digital revolution as the record companies did (and still do).
People can listen to music while doing any of a number of other things — exercising, driving, reading, cooking…the list goes on. Mobility works for music consumption, making the case for digital even more compelling. But when it comes to movies, the same isn’t true. People don’t tend to multi-task in the same way. Mobility, generally speaking, isn’t valued. Instead viewers have to focus on the movie (TV show, program) in order to derive the entertainment value. It’s a visual medium vs. an aural one. And that makes all the difference in the world. While music has made the transition to digital very quickly and with extreme results for some businesses, the same is not happening in the home video business.
One of my first history teachers encouraged the class to respond to every mention of “change” with “pace and degree?”. When this little maxim is applied to the home video business, the answers are that the pace of change is moderate, though perhaps faster than other eras, as is the degree of change. Blu-ray’s slice of the market is growing, but not dominating, the disc-based home video market. Meanwhile, digital distribution still faces key difficulties with access and selection. (This is where start-ups like Go Watch It are finding a niche.)
Consumers like DVD. It’s a stable, well-understood, hardy format which is still pretty cost effective. It transports easily and is simple to use whether you’re three or eighty-three. DVD players have a pretty significant market penetration rate, as high as 91%.
True, it doesn’t address ALL the changing needs of a modern, mobile audience, but it still delivers the goods for a vast majority of people. It doesn’t provide an entertainment solution ‘anytime, anywhere’, but it’s also not dependent on connectivity, which can still be knocked out by adverse weather and local problems (like competing bandwidth priorities within a household). If you hold it, you have it…
From our standpoint, it’s easy to see that clients still think that the format has legs. Giant’s project pipeline remains nearly 50% DVD and clients continue to make DVD the foundation of their work orders, even if they don’t produce a Blu-ray or upload to one or several of the numerous digital platforms. Clearly there’s still a continuing consumer demand for it. It’s the baseline against which all others formats are measured and compete.
We, of course, are pleased to see it and expect that DVD will continue to be part of our business for many years yet.