The end of late fees?

Mar 1st, 2010 | By | Category: Columns, Opinions

by Zach Becker

As I drove through Springfield, I noticed a Blockbuster closing on Independence. Not far from there, a Movie Gallery on Republic displayed a similar going of out business sign.

The poor economy no doubt played a part in these closings. Blockbuster posted a $434 million loss for the final quarter last year, while Movie Gallery recently filed bankruptcy for the second time in three years.

I can’t help but think these are indicative of a larger trend.

With the emergence and rapid growth of digital media distribution, the days of going to the store to rent or buy a movie (or book, music album, or video game) are numbered, I believe.

Already, sales of compact discs have fallen over 50 percent since 2000. By contrast, in 2009, people downloaded 1.16 billion songs online, up 8.3 percent from the previous year.

DVD sales went down 13 percent in 2009 to $8.9 billion. While the sales of Blu-Ray discs did go up in 2009, this emerging high definition format still only accounts for a small fraction of disc sales.

I’m afraid Blu-Ray might go the way of the SACD – Super Audio Compact Disc.

Introduced in 1999, SACDs offered higher definition audio than traditional CDs, but the medium, while not dead, has just never caught on with the mainstream.

I enjoy the high-definition quality of Blu-Rays on my Playstation 3, but I just do not see myself building a huge library of Blu-Ray discs like I have with my DVD collection. I probably will only pick and choose my favorite movies that I think deserve the high-def treatment.

It is hard to justify $25 a pop for a movie when I can stream thousands of movies online either through Netflix ($10 a month) or pay to download them straight from iTunes at a reduced price.

Even the video game market seems to be trending toward the direct download model, although perhaps a bit behind the other mediums due to the larger file sizes involved.

Beyond the assortment of downloadable classic and homebrew games, you can now download some full retail home console releases direct online. Sony is betting heavily on this concept with its PSPgo handheld, which has no physical media player whatsoever in favor of digital distribution.

Even books are being pushed off of the bookshelf and onto the screen.

E-readers like Amazon’s Kindle are rapidly gaining steam in the marketplace, with some predicting the device to reach $1 billion in sales in 2010. You can even read newspapers and magazines on it.

The digital distribution model makes so much sense economically. Forget the middle man and deliver the product right to your customers, eliminating costs like shipping and retail salaries.

I’m excited by all these changes, yet part of me is also saddened.

There’s something about the physical ownership of an item that, for all the instant gratification and cost savings digital distribution allows, is missing when your favorite movie is sitting on your hard drive rather than your shelf.

I remember as a kid when I would go to the store. I would see all the video games new and shiny and I would find the one I wanted most. I would save my money for months before finally getting the chance to take it home.

Removing the plastic wrap.

Carefully opening the box.

Quickly throwing the instructions aside.

Admiring the artwork on the cartridge.

Nudging it into my Nintendo and booting it up.

When I was finished playing, putting it on display next to my other favorite games.

Keeping those games for 20 years in storage, even though I have not touched them in five years.

It is an experience not replicated with a simple download.

The days of physical media are dwindling.

CDs, DVDs, Blu-Rays, books and disc-based video games are not going to disappear into the digital abyss overnight, but look ahead 15 years and you might be hard pressed to find many on store shelves rather than download servers.

Still, there may be hope for physical media in a long forgotten place: vinyl records.

You know, those big, flat, circular pieces of soft plastic with music on them that your parents or grandparents may store in the attic. Replaced by the 8-track, cassette and finally thought killed by the CD, vinyl records are coming back.

According to reports, sales were up 35 percent last year.

Completely non-digital and non-portable, some people find the analog sound of records to be superior to its digital descendents. Or perhaps they just enjoy owning a physical copy of their music.

Instantly downloading media is nice, but sometimes nothing beats holding the purchase in your hands and showing it off to your friends on your shelf.

Tags: , , , , , , ,

Leave a comment »

  1. Blu-ray Disc won’t go the same way as SACD, that’s a terrible analogy.
    SACD never did come out of a format war, there are still SACD and DVD-Audio discs being released.
    SACD only provided audio.
    Blu-ray Discs have seen a thousand fold more sales than SACD already. SACD never got out of niche status. New blu-ray Discs are routinely seeing 30~45% of market share in units versus DVD.
    Had WB not pulled the plug on HD DVD (Jan 4th, 2008), effectively ending the format war, then you would have a valid point and Blu-ray would definitely be destined to remain, as DVD-A and SACD, niche. Blu-ray at the 3 year mark had an 8% total market share, that was double what DVD had in its first 3 years and quadruple what CD did by 1986.

    When new titles are routinely closing in on 50% of unit sales vs. DVD? Well there’s no other valid assesment of the media than it’s firmly entrenched and here to stay. There will always be a market for physical media…especially now with HDTV’s well over 50% in US homes. Blu-ray players are now under $100 and movies on Amazon are as low as $6.99 in some cases with BLu-ray versions of new releases usually the same price as DVD. Soon you’ll just see one SKU, with both DVD and Blu-ray in the box.

    Bandwidth is nowhere near what it takes for a decent HD stream with lossless audio and with more convenient connections like HDMI meaning joe blow can hook up his own surround sound system, as well as more technically savvy gamers, fidelity is actually become more important in the home.

    What we need to see now is studios taking advantage of the current market and implementing Blu-ray as an audio format. If there is additional content (interviews, videos, etc.) and it plays on all Blu-ray players then it will likely see inital adoption faster than CD.

    One thing I definitely agree on…vinyl will still see a market. This is because it’s the only organic music experience. However high resolution Blu-ray Discs could definitely work where SACD and DVD-Audio failed, as long as they’re marketed properly with additional content.

  2. can you say… Netflix? streaming instantly and delivered in the mail, Blockbuster and other rental services are struggling to keep up with their own programs.

  3. Perhaps the format war between SACD and DVD-Audio is to blame for some of SACD’s troubles, but I think the real reason you never saw a winner in these format wars is because a third competitor won — mp3. It’s small download size trumped the superior quality of SACD and DVD-Audio. You did not have to go to the store to get music anymore. Instant gratification. Obviously, Blu-Ray has experienced more success already than either SACD or DVD-Audio, but I think as online movie rental and purchasing services spread further, you might see the same thing happen again where people trade a more sound technical product for one that can be had instantly, anyplace, anytime.