Good-bye DVD? I think not.
I’ve seen a couple articles this week about the coming supremacy of streaming over the disc. The latest, seen on Techcrunch.com, radiated excitement in “Report: More Movies Will be Streamed Than Watched on Disc in 2012”. In short, “…more viewers will stream movies than watch them on disc, an inflection point that can only mean the relatively quick demise of high-density optical media.” This moment, if it has indeed arrived, has been forecast by many pundits since the early in the adoption of Blu-ray. Most learned opinions at the time put the crossover somewhere in the 2015 time frame, but perhaps it’s here earlier than could be foreseen back in 2009. Technology changes, consumer tastes change…, but really, this isn’t really a surprise. It’s no secret that the home entertainment market for DVD & Blu-ray has been shrinking. Many have hoped that Blu-ray would replace the drop in DVD sales, but this hasn’t happened, nor may it ever. But are we really at the point where optical discs can be equated to buggy whips? Not so fast. For every story crowing the death of the disc, there’s another story showing the opposite side of the proverbial coin, such as this recent one in Home Media Magazine noting the strong growth in Blu-ray player penetration, a trend which certainly won’t halt overnight. While some of this back-n-forth is of the ‘he said, she said’ variety, we can’t ignore that discs are still a valued commodity by American and international audiences, a business still worth billions of dollars. This is a question I’ve often needed to answer in my role as chief evangelist for Giant Interactive and in other similar roles with other media companies. My answer hasn’t changed: While optical disc-based media won’t, perhaps, be the dominant form of media consumption for audiences henceforth, discs still have several advantages over streaming which will keep them in play for a number of years. * Broadband capability, while nearly ubiquitous in urban areas, hasn’t yet reached every corner of the nation, let alone the world. And internet speeds and operability can vary, which can have severe effects on the quality of experience. Optical-based media still represents an extremely stable, readily available way to distribute content. Indeed, many, if not all of the services, have not yet allowed for multiple streams to be engaged from a single account to a single household. * Has anybody heard of data throttling? Capping? Your data provider may have something to say about the coming wave of streaming. * People know DVD (and, increasingly, Blu-ray). They’re comfortable with it and understand it. With DVD player penetration rates higher than that of cell phones and computers it’s a technology which has become part of the mainstream, not just the toy of tech enthusiasts. * Niche audiences, for example will continue to utilize the disc as a way to find their content. The fact is that not everything is streamed. For example, if you’re looking for content in the ‘faith-based’ or ‘family-friendly’ genres, you can be hard pressed to find a strong showing on the big services. * Discs will still appeal to the collector or the the person who wants to own their content. With the studios still working out ‘windowing’ and ‘vaulting’ strategies, there still is a place for disc ownership. Warner Bros. has announced that Harry Potter will go in the vault soon, as do various Disney titles with regular frequency. Ownership begets control, and until audiences are assured that they’ll be able to consistently and seamlessly access what they want, the benefits of having a favorite movie or TV show under your control, in your livingroom (or car, or bedroom, or wherever) won’t be undervalued. The news of optical disc’s death is exaggerated, to put it mildly. While those on the leading edge of tech, the first adopters, may be leading the charge into streaming, there is still a huge audience out there who aren’t tech pioneers and who will continue to be patrons of the disc for many years to come. Giant Interactive, like many other media companies, will need to evolve to meet this changing world. We’ve already seen the harbingers of trend. Our digital delivery business, delivering digital encodes to iTunes, Amazon, Netflix, etc. represents a growing part of our business. Nevertheless, discs still play a major part and we expect that to continue for the near term. This switch won’t happen overnight and is likely to be more gradual and incremental than immediate. We’ll be ready, continuing to provide services to our clients so that they can continue to efficiently monetize content, serve their customers and prosper.