Hi all, I followed th ethread about the three reasons that the DVD medium
would disappear. Here is an article on yahoo regarding exactly one of these
three reasons.
I was just wondering how accurate does everyone think this article is?
steve
http://story.news.yahoo.com/newstmpl...c_nm/media_pir
acy_dc_1
Hollywood will win the war against illegal downloading but the battlefield
will be littered with casualties, including the DVD and CD formats as
physical means of distributing video and audio, according to a Forrester
Research study released Tuesday.
The study predicts that in five years, CDs and DVDs will start to go the way
of the vinyl LP as 33% of music sales and 19% of home video revenue shifts
to streaming and downloading.
Part of that stems from the continued proliferation of illegal file trading,
which has caused an estimated $700 million of lost CD sales since 1999. But
it will be due more so to efforts by the studios, cable companies and telcos
to finally deliver legitimate alternatives like video-on-demand, Forrester
researcher Josh Bernoff said.
"The idea that anyone who has video-on-demand access to any movie they are
interested in would get up and go to Blockbuster just doesn't make any
sense," Bernoff said. "(The decline) begins with rentals, but eventually I
think sales of these pieces of plastic are going to start going away because
people will have access to whatever they want right there at their
television set."
While consumers with VOD capabilities should grow within five years from 10
million to 35 million, or about a third of all U.S. television households,
the association that represents disc makers does not believe that output
will slow.
In fact, the Princeton, N.J.-based International Recording Media Assn.
estimates that the number of DVDs replicated each year in North America will
increase from a current 1.4 billion to 2.6 billion by 2008.
CD replications, though, are forecast by IRMA to fall by 15%-18% in the next
five years, about half the rate of decline estimated by Forrester.
"The consensus in the manufacturing business is that there will be a
decline, but we don't see as drastic a decline," IRMA president Charles Van
Horn said. "We see growth (in video and DVD), and I don't think it will be
because there are more pipelines to feed. It will be consumers buying
discs."
Analysts also caution that the shift from hard copy to virtual distribution
could be more gradual.
"People like walking into the store and seeing the product. It's part of the
entertainment," Barrington Research Associates analyst James Goss said. "The
studios would be just as happy to sell something in a streamed form or a
hard disc form. But once you download it to your computer, you're probably
going to burn it onto a CD or DVD, so you'd end up with the same optical
storage issues."
The Forrester report lists a number of winners and losers from the expected
changes.
Among the beneficiaries are Internet portals (news - web sites) that enable
on-demand media services, broadband suppliers such as cable and telcos and
the creative community, which would profit from the removal of manufacturing
and distribution costs and constraints. AOL Time Warner's decision to sell
off its disc manufacturing plants was said to be proof of this trend.
Media conglomerates could be among the losers if they do not have control of
emerging means of distribution like VOD, Forrester said. Such retailers as
Tower Records and Blockbuster will certainly feel the pain as sales and
rentals shrink, though they may be able to sustain business by associating
themselves with newer on-demand services. Major retailers including Wal-Mart
and Best Buy are expected to survive by shifting CD and DVD floor space to
sales of media devices.
The shift could also present several opportunities for companies if they
move quickly.
Television companies have about three more years to release shows on DVD. By
2006, it is estimated that negotiations will start to focus on making
content available on cable and Internet "basic VOD" tiers.
Movies studios are also urged to press the development of Internet-based
alternatives to cable VOD for movies-on-demand.
"On-demand media services have the potential to turn pirate losses into
gains even as they break the disc-based shackles that now hold back
entertainment," the report concludes.
Reuters/Hollywood Reporter
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