Movie downloads spell the end for DVD

Blu-ray's rise will only delay the eventual demise of digital discs for home viewing.

First came mail-order rental services, now film downloads at the click of a button. DVD rental and retail stores are braced for a fresh onslaught of competition, this time in disc-less form.

The DVD is only 10 years old and yet the doom merchants are predicting it could join the likes of VHS tapes - vanishing from high-street stores and household shelves. With reports that Apple is poised to launch full-length film downloads in Britain and other companies offering their own video-on-demand services, even DVD industry insiders admit the format may eventually die out.

Yet they argue that the collectability of box sets, the convenience of re-watchable discs and the relatively slow growth of downloads mean there is still plenty of life left in the little silver discs.

The British Video Association (BVA), which last month celebrated the DVD's 10-year milestone at a gala dinner complete with metallic dress code, expects to hold more celebrations in a decade's time. Lavinia Carey, head of the industry group, says that while its research shows the growing popularity of services such as the BBC's iPlayer and movie downloads from websites such as Vizumi, consumers still prefer to own - and give as presents - physical copies.

"Lots of people are getting used to the idea of accessing their content online but there is also this collecting habit," she says. "There are so many uses for the physical disc that people won't just drop it like a hot brick.

"Particularly for TV shows, people love the boxed sets; they love to have the collection and they love to be able to watch it when they want."

The BVA concedes that after being largely flat in volume and value terms in recent years, the DVD market is unlikely to see much growth. But digital films will absorb only a fraction of home entertainment spending - about 6% by 2012.

Screen Digest, a media research firm, predicts that by 2012 digitally delivered films will make up 2.6% of total spending of about �2.2bn on full-length films.

That is after including the assumption that films will become available on iTunes movie downloads in Britain later this year. The rest will consist of buying and renting Blu-ray discs and standard DVDs, it predicts. The emergence of high-definition Blu-ray discs is keeping retailers and film studios in an upbeat mood for now.

Kim Bayley, head of the Entertainment Retailers Association, said: "When it comes to movies, image quality is important to consumers, hence the boom in sales of high-definition TVs and so our view is that the most exciting new format of the moment is Blu-ray."

But retailers still have to keep an eye on downloads, she said. "It's important that the video business pays attention to the lessons learned by the music industry with the advent of digital."

Film studios argue Blu-ray will help the overall market grow as consumers seek formats that make the most of their high-definition television sets. Their line on video-on-demand is that it will not compete with DVDs, rather it is just another way to reach customers.

Other industry experts argue that major practical considerations mean that digital has a long way to go before becoming mass market. Helen Davis Jayalath, head of video at Screen Digest, says Apple's iTunes service will capture a "substantial" market share but the total online market will remain small for some years.

"Although all these digital services are generating a huge amount of column inches they are actually not generating a huge amount of revenue yet," she says. "One of the key issues that has been a problem up till now is that most online services don't come with a system for getting that content on to the television, which is where most people want to watch it.

"For them to become mass market it has got to become incredibly easy to watch the films on your television set."

Gary Morris, founder of UK-based download service iLoaded, argues that such technology is already available and that the DVD industry needs to reassess both its forecasts for DVD survival and for digital growth. He is telling investors there will be "mass, mass sales" online in just two years' time.

"In 2010 the DVD market will really notice online and really notice a decline. Five years I would take as the time when very few DVDs are being sold," he said, pointing to the emergence of "intelligent homes" with servers carrying digital files of music and films to pipe into various rooms.

"Over time, DVDs will just become one of those things that were lovely and in a couple of years' time you'll be able to download a Blu-ray two-hour film in probably 10 or 15 minutes. This is very much the dawn of that age in the same way it was with music downloads a few years back."

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Blu-Ray's place in a movie download world

So Toshiba have announced they are going to terminate manufacture of HD DVD players. So the HD format war is pretty much over with Blu-Ray left standing. The future for digital downloads looks even more brighter and could even kill Blu-Ray, but not yet.

Our generation is now pretty much accustomed to downloading at the click of a mouse button.
This generation has nearly already abandoned CD?s, and physical media like DVDs and Blu-ray is inevitably next.

However, there are many people who buy DVDs by the millions and will likely buy Blu-Ray now that HD wars are over as generations before bought VHS. Substantial generations have grown up with physical media, and this isn?t about to change tomorrow.

Another aspect of why buying Blue-Ray won't disspear quickly is that many people do not want to watch movies on their computer and prefer to watch movies on their TV sets. I'm also in this way of thinking as my HD TV is a better experience that on my 17 inch Macbook Pro, although the TV set can't easily come to bed with me!

There are ways of brining digital downloads to TV sets, but none have anywhere near the penetration yet to offer a serious alternative to DVD and Blu-Ray. Apple is now offering HD movie downloads via their Apple TV box, but try and find more than a handful of people who own an Apple TV. Others offer a similar service such as Vudu, and there?s even Microsoft Media Center, and yet none are mainstream. Until such time net or network enabled devices become mainstream, TV and physical media will retain the upper hand.

There are also current Broadband limitations with many providers considering capping downloads on internet plans. The problem going forward is the days of cheap unlimited internet access may well be coming to an end as more and more download video and use P2P services.
The low cost of bandwidth itself was a historical quirk that came about due to the first dot com bubble. That extra remnant capacity is being used now, and the costs of increasing capacity will likely be passed on to consumers. If this means more capped internet plans that immediately puts a constraint on the amount of video that can be downloaded.

Outside of the United States this is already the case with capped plans in many countries, restraining potential growth in downloads (simply users will only be able to download so much content.)

Combine this with the need for high speed internet access that isn?t universally available.
Digital video will not become dominant where it takes hours, sometimes days to download, when users can simply rent or buy the title on physical media.

I?m all for the supremacy of digital downloads allowing streaming content from any computer in the house or NAS drive to main TV set or Apple TV. But people who have these gadgets in their home are in the vast minority. Blu-Ray will likely be the last big mainstream physical media technology ever and it will have a strong future. The various factors needed for mainstream digital downloading and viewing will eventually combine to finally kill Blu-Ray (and the domination of all physical media) sometime between 2010 and 2020.

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Warner Bros dumps HD DVD for Blu-ray

Warner Bros., the only major movie studio to release titles on both of the rival high-definition video disc formats, has decided to drop HD DVD and exclusively back Blu-ray Disc, it said Friday.

The move could prove decisive in determining which of the two formats becomes the de facto DVD replacement for high-definition content. Currently, both formats are battling to secure a lead but neither has managed to obtain a meaningful market share due to consumer indifference as a consequence of the battle. As a result, the market for high-definition movies has seen its growth stunted and companies like Warner have lost potential sales.

Warner said the decision was made in part as a response to this situation.

?A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry,? said Kevin Tsujihara, president of Warner?s home entertainment group in a statement.

The move comes on the eve of the Consumer Electronics Show, which kicks off on Monday in Las Vegas, and is sure to light a fire under the HD DVD camp, which is chiefly backed by Toshiba and also includes Paramount, Universal, HBO Video, Microsoft and Intel. The HD DVD Promotion Group has a previously scheduled news conference on Sunday and the rival Blu-ray Disc group is scheduled to speak the following day.

Companies from both sides of the format battle are expected to show their latest players and talk-up their own formats during CES.

Last year?s CES saw the unveiling by Warner of a hybrid disc called Total HD. The disc attempted to break the format deadlock by offering one side compatible with HD DVD and the other side compatible with Blu-ray Disc. However, the disc never made it to market and Warner gave up on the hybrid format later in 2007.