December 14, 2010

DVDs not dead yet

Are DVDs going to remain relevant much longer?  According to Benjamin Malczewski at Library Journal , "That depends..."  In an article published last month he outlines some factors that suggest the streaming video revolution has not yet arrived.

In reading/listening to all the media coverage of the inimitable demise of DVDs, check the author of the obit. Marketers often try to dictate and influence the public by sending urgent messages to shift gears, but retail sales, library circulation, and usability statistics have yet to verify the imminence of such a shift, suggesting, to the contrary, that the future of streaming isn’t “now,” just yet. DVD sales have been in decline since 2007, but the market is stabilizing, and retail sales of Blu-ray disc players and HDTVs are rising.

Further attesting to the durability of the disc is that DVDs still have a lot going for them: they’re portable, easy to operate, enjoy broad use, and offer tried-and-true playability. They are also the perfect accumulative showcase for uncut editions, blooper reels, “making of” featurettes, deleted scenes, voiceover commentaries, alternative endings, and other “extras” that viewers have come to expect and that studios count on to resuscitate titles for second-life marketing. With streaming—at least, the nonenhanced, basic streaming experience currently available to the consumer market—dismembered à la cart add-ons simply wouldn’t be the same and certainly not nearly as appealing to historians and catalogers.
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The likely scenario is that when the shift to digital delivery occurs, it will be gradual. Until then, we will continue to see a compartmentalized marketplace, one in which competing film formats are divvied up according to users’ preferred delivery methods, be it streaming to their TVs or laptops; downloaded to their smartphones or iPads for on-the-go viewing; or at home, slipped into their DVD/Blu-ray disc players or via premium cable subscriptions or video on demand (VOD).

Whatever the format...it all begins and ends with the studios. They make the rules and dictate the pace of the game...In 2009, theatrical releases generated $9.87 billion, DVDs retailed in excess of $8.7 billion, and pay TV accounted for $1.27 billion of sales; additionally, premium pay-TV deals brought more than $100 million per year to each of the major studios. The money tale thus dictates that, following a film’s theatrical release, it goes first to DVD, then to VOD, then to premium cable.

A film’s posttheatrical release window is typically about three months. While some studios have flirted with the notion of same-day theatrical DVD/VOD/streaming releases, there is just too much profit to be made by the studios (which count on this money to put out the latest and greatest technologically advanced movies each year) in keeping releases sequential, with each distribution medium making its piece, and often further paying percentages back to the studio at each rung.
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Technology is moving fast. Our delicately organized, Jenga–like balanced motion picture economy, however, is not. Where money in hard times is concerned—be you developing studio, title distributor, or front-end consumer—the preference is minimal risk, with a mind toward sustainability. Consistent (and rising) DVD circulation stats reflect this fiscal conservatism, and certain intrinsic factors—namely, a financially confident consumer encouraged by an accessible, durable, and consistently performing premium product—just aren’t in place yet.
We are still very much in a transitional period, trying different formats and delivery methods on for size. Many distributors have only just begun transferring titles to Blu-ray disc, fewer have expanded to streaming. Change will come, but only when the economy and technological environment (namely, an improved standard for broadband) are ready to support it.
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