Digital distribution not expected to rule packaged media anytime soon

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.

[Adam @ Feb 2nd 2009 12:51AM]

I don't think digital downloaded movies will over take blu-ray/dvd for years and years if ever.

If millions still needed that converter box to get over the air tv i could only assume that there are even more millions that don't have high speed or don't have a computer or a stream box hooked up to the tv or don't have any interest in doing so like myself.


I will stick with Blu-ray!

[Craig @ Feb 2nd 2009 1:09AM]

This isn't hard to figure out. The picture quality available from physical media will outstrip that available from downloads for a looong time to come...we just don't have a public Internet infrastructure that permits shuttling 40GB of video data on any kind of reasonable timeframe.

As a result, the market will splinter into two groups: those that insist on the best PQ and are willing to put up with the hassle of physical media, and those who are more interested in convenience over PQ (& will go for downloads).

[bboston7 @ Feb 2nd 2009 1:17AM]

It's good to know that when I buy some phisical media, I can enjoy it 80 years from now! If I download a movie from itunes, I can only watch it as long as they have their DRM servers online. That means that if apple goes bankrupt 5 years from now, I can't watch my movies!

[Tom @ Feb 2nd 2009 1:26AM]

I don't think too many are that concerned with the ABSOLUTE perfect quality to forgo the convenience of downloading Truth is, a BRrip is PLENTY good enough for 99% of the people out there..

[Temple @ Feb 2nd 2009 2:41AM]

The biggest problem with digital distribution is that it doesn't offer the user any freedom.

I can't play my downloaded file on any other machine due to the DRM, I can't take it another room or transfer it if the machine I purchased it from breaks , hell, I can't even watch I movie I bought on iTunes in a Xbox or Playstation(or vis versa). I can't let my brother or mother borrow my movie or take it to a friend's house. I can't sell it, give it away, or donate my copy once I'm done with it. Those are freedoms I have with a physical media like DVD and Blu-ray.

Most of the $1.5bil figure is obviously from Cable Video-on-Demand. And maybe that's where digital distribution belongs - the 'rental' digital distribution side. Paying a few bucks to watch a movie once and not having to worry about DRM, good as a supplement/replacement for Blockbuster and Netflix, but as a persistent format.

[dan @ Feb 2nd 2009 5:25AM]

Digital distribution would ruin my tried and tested tactic of buying everyone 3-for-2 DVDs at Christmas.

[Penguin Warlord @ Feb 2nd 2009 8:35AM]

If you want digital distribution to take off you only need to do one thing. Give Canadians decent internet speed at decent rates. We're getting gouged like hell up here for crappy internet service and we still download the most pirated movies. Give us the bandwidth to download high quality movies and give us a decent downloadable video store (read: we don't have one) and digital distribution would take off.

[Lil Smurth @ Feb 2nd 2009 2:03PM]

I'm pretty sure whoever streams movies and such, like myself, do not have to worry about DRM issues. There are plenty of ways to download your movies, music, etc. w/o having to worry about DRM. I have a huge library of Blu-Ray and DVD Rips on two of my 2TB external hdds. I have my PS3 set-up in my parents family room and I have it set up where they can browse the movies on my computer, pick whatever movie they want to watch, and my computer streams it to my PS3 with 100% flawless connection and I constantly update the movies whenever a new one comes out in theater. And they have comcast internet and have no problems.

And when I say there are plenty of ways to not have to worry about DRM, there are. Some legit and some not so legit.
And TVersity makes for a great software to use for streaming.

[Will Smash @ Feb 4th 2009 6:22PM]

This company is promising a virtual disc format in a few months that delivers the same VC-1 HD video that is used in Blu-ray discs www.retailzip.com

[mysticcalfx @ Feb 2nd 2009 12:51AM]

Why?....

because people still enjoy driving 5-10 miles to their local walmart to buy a "legit" copy that will almost "always" work

or reading the stupid extras. or for a fricking wasteful collection

[John @ Feb 2nd 2009 12:54AM]

note how this is measured in dollars - it's only legit sales. So physical copies are always more "always" working than the purchased digital ones.

[Kspraydad @ Feb 2nd 2009 12:57AM]

I hear Netflix delivers hardcopies right to your mailbox. Amazon too!

[Professor Tom @ Feb 2nd 2009 1:05AM]

Just because you download the latest disposable, popcorn movies doesn't meant that everyone else is like you. Some of us want to fully expirence the movie and that includes seeing how it was made and the struggles that were endured to bring the film to the theater and home entertainment system.

[DBrim @ Feb 2nd 2009 1:11AM]

I have about 10 places that I can get blu ray movies within walking distance. Also, a similar amount near work. Or I can just get it on Amazon and walk about 20 feet to my mailbox.

I don't waste tons of hard drive space, I don't have to waste time sorting through torrents, and I don't have to worry morally. Yeah, I think I'm good the way I am.

[timothyms @ Feb 2nd 2009 12:06PM]

People still buy a lot discs and will buy discs. Downloads will eventually kill the rental stores but as for buying media, people will buy movies they like on disc especially given the limitations of downloaded movies. Space being one. Even with a 1 TB drive you'll be able to store about 70 hi def movies, then what delete the rarely watched movie you bought for $20. I don't think so. Besides $7 for a VOD is still pricey in my book. Especially when I can get a movie at redbox for $1. Physical media is going to be around for along time. Unless the studios stop using DRM and allow us to burn our downloads to disc, but what are the changes of that?

[Blacksheep @ Feb 2nd 2009 12:54AM]

There are so many people where I live using broadband, that basic web searching slows to a crawl during weeknights after 5 p.m. Now Imagine trying to stream or download a 1080i/p movie on this same network, basically a nightmare. They are right that there needs to be more bandwith available, but that's even being throttled now by Cox and the like, so before physical media is replaced, those networks are going to have to get much faster and without restrictions. Of course Blu-Ray has a way to go considering the BDs cost 2-3 times as much as DVDs. I predict DVD for the win this year, especially with the recession and streaming will remain low quality, thus keeping DVD in the game further.

[Clint Gunter @ Feb 2nd 2009 1:50AM]

Where do you buy your BD's, where they are 2-3 times as much as DVD's? Holy crap!

[Jon Acheson @ Feb 2nd 2009 10:27AM]

Blu-Rays at retail stores in my neighborhood typically cost around $29, as opposed to $20 DVDs. Prices for both drop to $10-15 for titles that have been out for a while.

If you buy online, and catch sales, you can get Blu-Rays for the prices you would pay buying DVDs at retail.

[Kspraydad @ Feb 2nd 2009 12:56AM]

As long as basic broadband/dsl in Canada is capped at 60GB I'll be buying my video content on disc.

[Leo @ Feb 2nd 2009 1:34AM]

Agree. One and a half movie a month would be a joke! For at least next 5 years there's no way digital downloads will be popular.

[Brad @ Feb 2nd 2009 2:24PM]

And now you know why they're capping it.

[Kevin @ Feb 2nd 2009 12:58AM]

It's hard for consumers to pay money for something they can't touch, like digital downloads. Especially when much of the target audience is adept at downloading and can produce the same thing for free.

[Michael Scrip @ Feb 2nd 2009 1:46PM]

You pay $10 to go "see" a movie at the theater... you don't get to walk out with the reels.

I'd pay for a digital rental... but I wouldn't pay for a digital purchase.

That said... I hardly ever buy movies anyway. Netflix DVDs and Redbox work well for me.

[William @ Feb 2nd 2009 1:06AM]

I'm not too sure, but I'm pretty sure that there is a bandwidth "shortage" in the world right now. Mainly to do with outdated wiring etc. To replace all these wires with new 'optics' (i think that is the term) will cost too much for private ISPs.

So, in a nutshell, the speed of transfers won't go up until the technology is updated.

[phinnvr6 @ Feb 2nd 2009 1:09AM]

Well digital distribution is nice and all but there is no disputing the quality of Blu-ray disks. The incredible color and resolution (with almost no compression) and awesome audio quality has me hooked. Any my only game console (PS3) plays them along with all my gaming so its win win.

So yea, I see a future for digital dist but that doens't rule out Blu-ray as being the ultimate in quality. Especially with a Netflix account for unlimited rentals, and prices are coming down.

[crescentdavid @ Feb 2nd 2009 1:16AM]

There's no either/or here. It's a mixed environment and will be ... for quite some time. Netflix knows this- that's why it offers regular DVD's, Blu-ray and streaming video. It's also why Netflix posted some major revenue increases in Q4 2008 ... a time where many tech related industries were feeling the pinch. Hastings, Netflix CEO, said it was clear that streaming media was energizing growth.

There's also economies of scale beginning to play out and Blu-ray players are radically coming down in price. Blu-ray rentals are also reaching critical mass. Whether one particular media or the other ultimately wins out is not the issue, really. More likely it's consumers making the choice just how much quality are they willing to pay for ... and how much of a choice do they want?

Samsung has a somewhat pricey blu-ray player that includes the capability of accessing and streaming netflix content and it works beautifully and transparently. Others are following. Whether it's on the HDTV or the player ... companies will continue to push choice through the inclusion of streaming and in terms of media. Some consumers will continue to demand these kinds of choices over the next 2 or 3 years. Others won't mind being marginalized ... wanting to stay away from a possible "bag of hurt."

I've voted for choice. The Netflix model works for me ... both in "concrete" media (especially blu-ray) and in streaming movies. If I'm really desperate, I can drop by the video store while running errands or shopping.

[Andy D @ Feb 2nd 2009 1:17AM]

I just don't see how digital distribution will win if there isn't a standard. I'm not going to buy media on any platform because it's tied to that platform.

[anus1220 @ Feb 2nd 2009 1:18AM]

but michael pachter is an idiot

[balls @ Feb 2nd 2009 1:26AM]

okay, but what about Michael Paxton?

[OmegaVader @ Feb 2nd 2009 1:23AM]

I think it's important to note that while revenue for digital distribution may not be much higher, the profit probably is since it's far cheaper to supply.

[balls @ Feb 2nd 2009 1:25AM]

I dunno, with all the people who buy LG, Vizio, Slyvania brand shitboxes, I wouldn't be surprised if pseudo hd streamed content wins out soon.

/snob

[FILA @ Feb 2nd 2009 1:27AM]

yea one day streaming video will take over, but for now, as long as the ISP's are capping off there bandwidth and speed where gonna be no where near it. Its weird that they cap off everythign and are so strict now days since all this online shit is popping off from hulu to the set top boxes. Im all for streaming video but its gotta be high def, well except you kno the old movies, cuz there never be high def, but while people are buying dics, hold up let me check my torrent...

[RikF @ Feb 2nd 2009 1:36AM]

Film, even fairly old film (post the Lumiere brothers anyway!) has much higher resolution than any digital hi-def that consumers are seeing at the moment.

[FILA @ Feb 2nd 2009 2:49AM]

Really? what would films resolution be then compared to modern day pixels

[GingerFox @ Feb 2nd 2009 5:06AM]

well it depends, they actually use like a scanner to scan the originial film in to whatever resolution they feel they want, then digitally rematser it and all that, i saw it on tv once lol

[pika2000 @ Feb 2nd 2009 1:39AM]

The old media won't let online distribution taking over. Proof is how ISPs are now putting caps in the days where online connectivity is pretty much a must-have.

[Mark @ Feb 2nd 2009 1:40AM]

The ONLY way for digital distribution to rule over discs is when the ISP's no longer have a download cap. Until then, physical media will always be on top.

[BobTurbo @ Feb 2nd 2009 1:50AM]

In Australia, the average user would have difficulty watching two hours of youtube videos per month, let alone anything of movie-watching quality.

[phelland @ Feb 2nd 2009 1:52AM]

cool!

[Hife @ Feb 2nd 2009 2:03AM]

The pace the predictions change at is exhausting.

[Brian @ Feb 2nd 2009 2:05AM]

Downloadable media reached 1.1 billion dollars last year? That is AWESOME news! Why is everyone over looking that?

I have zero interest in Blu-Ray. The picture quality between the thirty dollar blu-ray movie and the fifteen dollars I pay for Netflix's enormous DVD library and downloadable content is to large a gap to justify the difference in price. Why would people buy BluRay when their trying to watch their budgets?

[Joe H @ Feb 2nd 2009 2:27AM]

I disagree entirely with most of the comments here. Sure, we all know that Bluray is superior, and we all care about that, but quite frankly, the average consumer doesn't. The only reason DVD caught on over VHS is its added convenience, aka not needing to rewind, smaller format, etc. The extra quality was a nice bonus, but the average consumer doesn't care about that. Bluray, while it looks great, is something that doesn't give any extra convenience features. Besides that, DVD looks 'good enough' to the average person.

The iPod/iTunes is a great example of this. iTunes and Amazon Music Store for that matter are both lesser quality than CDs, but you don't see that many people rushing out to buy CDs anymore.

Digital distribution of video is going to be one of those things that in the next year or two will take off with the general public and when it does, to everyone else it'll look like it's all of a sudden.

I agree that the ISPs are desperately trying to stop that for the future with the caps, but we'll see how that goes.

[??? @ Feb 2nd 2009 2:42AM]

I second this. I never understood what was so special about Blu-ray or HD-DVD other than an increase in storage space. It never seemed more than an evolutionary step up, and not a revolutionary one (like VHS to DVD was). We've kinda reached an end-game there for the interim, at least until broadband in America is actually comparable to Europe (and trust me, top-of-the-line DOCSIS 3.0/FOTP is still shitty in comparison to the pipes you see in Europe).

[BobTurbo @ Feb 2nd 2009 5:06AM]

I don't agree that DVD looks good enough, at least not on a fixed resolution display. It looks perfectly fine on a CRT.

Plus I find that moment when you have to swap places with the person next to you as you browse through the movie rentals to sometimes be quite arousing.

[balls @ Feb 2nd 2009 11:43AM]

Joe is right. To the uninformed consumer, there isn't much perceivable difference between an upspiffed DVD and Blu-ray.

This is the same consumer that is buying budget brand TV sets like Vizio, Olevia, Slyvania, and LG.

[loosely_coupled @ Feb 2nd 2009 2:47AM]

I can't even count the number of times I've argued the bandwidth argument, so I'll go with a different one.

As long as the stupid movie studios continue to place innane restrictions on digital media, people will always avoid it for purchases, if not rentals as well. If I own a DVD or Blu-ray disc, I can take it with me wherever I want, loan it to friends, and even resell it. Digital download from Amazon? Not so much...

[GingerFox @ Feb 2nd 2009 5:08AM]

very true, its a shame really because it really does turn people to download less legally lol

[William McCormick @ Feb 2nd 2009 3:46AM]

Well this is a little complicated but i think that Digital Media will become domonit with BluRay only being used by people with the TV's and WANT that kind of experience. but then you have people like me who does not care if the quality is so good that you can count the amount of hair on some persons head, but the quality of the story line.

[JL @ Feb 2nd 2009 3:47AM]

It is true that many people don't have a fast enough connection to play HD streams; however, Blu-ray isn't exactly a prolific format and doens't have the advantage of riding on a service many people already have. Broadband speeds will increase, and streaming libraries will grow, and this will happen without the user needing to do anything (except perhaps pay more per month--but many people would regardless). In this economy, people are cutting back on luxuries. Physical media may have the advantage of quality, but considering how many people are unconcerned with quality now (as evidenced by Blu-ray's not-exactly-exploding market share), it seems unlikely that it will be a major factor in the majority of the population's entertainment decisions. Streaming offers a simpler alternative and a much cheaper investment. Buying, say, the Roku Netflix player is cheaper and more convenient than buying Blu-ray; people don't need to repurchase their library in a new format. Not only that, but buying a Blu-ray player will likely mean for many people that they will need to upgrade the rest of the entertainment system in the process. Why bother watching and investing in Blu-ray media if the rest of your system isn't up to par? So the choice then becomes a decision between an expensive new system with a repurchased library or a streaming player with the ability to bring better quality in the future without necessitating another generational change in hardware. In this economy, I suspect most people will choose to keep their DVDs, and if they even decide to buy another entertainment device, they will buy a streaming player over Blu-ray. If Blu-ray is to survive, it needs to wake up and realize that quality is no longer a driving factor for most people. People are tired of and apathetic toward format wars, since they recognize that it's just another excuse for the entertainment conglomerates to march everyone single file into a new, money-sucking exercise. People will eschew this exercise and head for cheaper alternatives or even decide that DVD is still good enough for them.

I had been a Blu-ray proponent for a little while, but I've come to realize that remaining fixated on "picture quality" no longer makes sense in the current model. The entertainment industry is counting on everyone to take the compulsory next step up the hardware upgrade ladder, enabling them to reap more and more money from the prostate masses. It has become clear to me that picture quality forms a very small part of an increasingly complex decision process. I now recognize that I can no longer in good conscience take the next hardware step if the benefits do not warrant the increasing prices. It is irresponsible for me to continue to bend over backwards for the conglomerates and give them whatever it is they ask for the "privilege" of viewing a clearer picture. Such a decision needs to add up in a broader sense than just better quality. We as consumers need to demand more of the complacent corporations than just another dressed-up "Special Edition" product (buy it because it's the next one!). Corporations expect that you'll buy into a new movie ecosystem just because it's newer rather than because it's actually better in a broader sense.

[AltairAntares @ Feb 2nd 2009 3:48AM]

If blu-ray actually cost a reasonable amount of money then I'd believe them, but for now at least with players this expensive, and disks this expensive, blu-ray is simply too expensive to be able to let people make high-def a common item, especially in this economic climate. If they do wake up however and make it a reasonable price, then yeah, they just might be right.

I'll tell you right now though, I've never watched anything that's blu-ray, and I have no intention of buying anything, or advising people to buy it until the price is much lower.