The Demise of Discs: Hi-Def DVD in Jeopardy.

Report Forcasts the Demise of Discs

Video Business in Depth: DVD Growth will be replaced by VOD, Forrester
says.

By Daniel Frankel 9/10-03

SEPT. 10 | In five years, video-on-demand will represent 12% of all home
entertainment revenue, according to a new report from Forrester
Research. That will be enough for on-demand delivery to take a bite out
of DVD sales, reorder windows and hobble the introduction of HD-DVD, the
researcher predicts.

In the report, titled "From Discs to Downloads," Forrester forecasts
healthy growth in consumer spending on packaged home video through 2006,
fueled by DVD growth. At that point, however, packaged video revenue
will begin a gradual decline at the hand of all forms of VOD, according
to the report.

DVD's growth "will continue for quite a while, but not forever. And what
replaces it will not be another format. It will be delivery down a
wire," said Forrester analyst and report author Josh Bernoff.

The report rests upon the premise that online piracy in the video
entertainment market lags only three years behind the recorded music
industry, which has lost $700 million so far to file-sharing, Forrester
says. The researcher maintains that movie studios will embrace on-demand
services as the best defense against piracy and develop them at the
expense of home video.

The proliferation of broadband connections (30 million consumers will
spend $14 billion annually in 2004, Forrester says) and the widespread
availability of inexpensive storage devices such as PC hard drives and
digital video recorders are already making it easier for file-sharers to
swap video. In fact, 20% of the 12- to 22-year-olds that Forrester terms
"juvenile pirates" have downloaded a movie in the past month, the report
says. A quarter of these users say DVD is too expensive, and 11% say
they already buy fewer DVDs, according to Forrester.

"Rather than risk the meltdown that happened in music, studios are
responding by embracing all forms of on-demand delivery," the report
reads. That extends, Forrester believes, to releasing movies at the same
time as DVD by 2004 and to moving the VOD release to within two months
of theatrical release by 2006.

"In the next three years, cable VOD and other on-demand distribution
options will reduce store-based movie rental revenue by 16%," it says,
citing the growth of Internet and cable VOD services. Cable VOD services
will be in 85% of homes by 2004, Forrester predicts.

In five years, the report suggests, "Home video rental revenue will drop
37%, leaving those stores to focus on sales. But cable and satellite
will begin to nibble away at DVD sales by allowing permanent downloads
of content to PC and DVR hard drives."

Bernoff also contends that VOD growth could result in a next-generation
high-definition DVD format being "stillborn."

A number of key home entertainment executives took issue with the report
last week, most specifically, its aggressive forecast for rapid
cable-based VOD proliferation.

Blockbuster Video officials, for example, cite recently revised Kagan
World Media data that suggests that cable VOD revenue will total only
about $2.8 billion by 2008, because cable providers will remain too
capital constrained to establish the infrastructure. Also, they say
studios enjoy too much of an advantage in margin with DVD over VOD to
let physical media disappear too soon.

"We're not worried about VOD," said a Blockbuster spokeswoman. "VOD
continues to happen much more slowly than predicted. And when it does
reach saturation, we believe it will remain a nice upgrade for
pay-per-view because of the studios' financial interest."

"The report's assumptions for adoption of digital delivery of movies via
cable and the Internet appear wildly optimistic in light of the much
more modest estimates of longtime industry analysts," Bo Andersen,
president of the Video Software Dealers Association, said in a
statement.

According to Charles Van Horn, president of the International Recording
Media Association, the Forrester Report also fails to take into account
the effects of consumer education programs designed to combat piracy as
well as legal initiatives recently undertaken by the Recording Industry
Association of America.

For its part, IRMA is predicting a 15% decline in CD manufacturing by
2008 but expects DVD replication to nearly double to 2.6 billion units
during the next five years.

Meanwhile, a studio official actively involved with the development of
HD-DVD suggested that proliferation of HD-VOD is too far out to be
considered. In fact, he suggested that a time of growth for
standard-definition VOD was a "perfect" time for suppliers to introduce
a next-generation physical format such as HD-DVD.

Retailers contend that the report fails to take into account their own
participation in electronic distribution.

"We see no reason why the Blockbuster brand can't be in the VOD arena,"
said the Blockbuster spokeswoman.

Added an official for Borders Stores, a retailer experimenting with
online music distribution: "We see a day when physical and digital
formats co-exist."

The Forrester report is based on data from two separate consumer surveys
conducted by the research concern this year with more than 6,000 total
participants and data from BigChampagne, a peer-to-peer monitoring
service.

http://www.videobusiness.com/article...1&catType=NEWS

Scot Gardner

This "Sky is Falling" story has been around before DVDs existed.
The studios might want it but the consumers will never stand for it.

"Scot Gardner" <> wrote in message
news:20030911113128.438$...
> Report Forcasts the Demise of Discs
>
> Video Business in Depth: DVD Growth will be replaced by VOD, Forrester
> says.
>
> By Daniel Frankel 9/10-03
>
> SEPT. 10 | In five years, video-on-demand will represent 12% of all home
> entertainment revenue, according to a new report from Forrester
> Research. That will be enough for on-demand delivery to take a bite out
> of DVD sales, reorder windows and hobble the introduction of HD-DVD, the
> researcher predicts.
>
> In the report, titled "From Discs to Downloads," Forrester forecasts
> healthy growth in consumer spending on packaged home video through 2006,
> fueled by DVD growth. At that point, however, packaged video revenue
> will begin a gradual decline at the hand of all forms of VOD, according
> to the report.
>
> DVD's growth "will continue for quite a while, but not forever. And what
> replaces it will not be another format. It will be delivery down a
> wire," said Forrester analyst and report author Josh Bernoff.
>
> The report rests upon the premise that online piracy in the video
> entertainment market lags only three years behind the recorded music
> industry, which has lost $700 million so far to file-sharing, Forrester
> says. The researcher maintains that movie studios will embrace on-demand
> services as the best defense against piracy and develop them at the
> expense of home video.
>
> The proliferation of broadband connections (30 million consumers will
> spend $14 billion annually in 2004, Forrester says) and the widespread
> availability of inexpensive storage devices such as PC hard drives and
> digital video recorders are already making it easier for file-sharers to
> swap video. In fact, 20% of the 12- to 22-year-olds that Forrester terms
> "juvenile pirates" have downloaded a movie in the past month, the report
> says. A quarter of these users say DVD is too expensive, and 11% say
> they already buy fewer DVDs, according to Forrester.
>
> "Rather than risk the meltdown that happened in music, studios are
> responding by embracing all forms of on-demand delivery," the report
> reads. That extends, Forrester believes, to releasing movies at the same
> time as DVD by 2004 and to moving the VOD release to within two months
> of theatrical release by 2006.
>
> "In the next three years, cable VOD and other on-demand distribution
> options will reduce store-based movie rental revenue by 16%," it says,
> citing the growth of Internet and cable VOD services. Cable VOD services
> will be in 85% of homes by 2004, Forrester predicts.
>
> In five years, the report suggests, "Home video rental revenue will drop
> 37%, leaving those stores to focus on sales. But cable and satellite
> will begin to nibble away at DVD sales by allowing permanent downloads
> of content to PC and DVR hard drives."
>
> Bernoff also contends that VOD growth could result in a next-generation
> high-definition DVD format being "stillborn."
>
> A number of key home entertainment executives took issue with the report
> last week, most specifically, its aggressive forecast for rapid
> cable-based VOD proliferation.
>
> Blockbuster Video officials, for example, cite recently revised Kagan
> World Media data that suggests that cable VOD revenue will total only
> about $2.8 billion by 2008, because cable providers will remain too
> capital constrained to establish the infrastructure. Also, they say
> studios enjoy too much of an advantage in margin with DVD over VOD to
> let physical media disappear too soon.
>
> "We're not worried about VOD," said a Blockbuster spokeswoman. "VOD
> continues to happen much more slowly than predicted. And when it does
> reach saturation, we believe it will remain a nice upgrade for
> pay-per-view because of the studios' financial interest."
>
> "The report's assumptions for adoption of digital delivery of movies via
> cable and the Internet appear wildly optimistic in light of the much
> more modest estimates of longtime industry analysts," Bo Andersen,
> president of the Video Software Dealers Association, said in a
> statement.
>
> According to Charles Van Horn, president of the International Recording
> Media Association, the Forrester Report also fails to take into account
> the effects of consumer education programs designed to combat piracy as
> well as legal initiatives recently undertaken by the Recording Industry
> Association of America.
>
> For its part, IRMA is predicting a 15% decline in CD manufacturing by
> 2008 but expects DVD replication to nearly double to 2.6 billion units
> during the next five years.
>
> Meanwhile, a studio official actively involved with the development of
> HD-DVD suggested that proliferation of HD-VOD is too far out to be
> considered. In fact, he suggested that a time of growth for
> standard-definition VOD was a "perfect" time for suppliers to introduce
> a next-generation physical format such as HD-DVD.
>
> Retailers contend that the report fails to take into account their own
> participation in electronic distribution.
>
> "We see no reason why the Blockbuster brand can't be in the VOD arena,"
> said the Blockbuster spokeswoman.
>
> Added an official for Borders Stores, a retailer experimenting with
> online music distribution: "We see a day when physical and digital
> formats co-exist."
>
> The Forrester report is based on data from two separate consumer surveys
> conducted by the research concern this year with more than 6,000 total
> participants and data from BigChampagne, a peer-to-peer monitoring
> service.
>
> http://www.videobusiness.com/article...1&catType=NEWS
>
>

Zimmy

Yep...this is just another re-write of the same Forrester report. It's not
the first, and won't be the last. Anyone's who's ever consulted Forrester
should know to take their report with a large grain of salt.

Somehow this time they did a great job of confusing the obvious.


in article bjq63g$lrdjt$, Zimmy at
wrote on 9/11/03 8:58 AM:

> This "Sky is Falling" story has been around before DVDs existed.
> The studios might want it but the consumers will never stand for it.
>
> "Scot Gardner" <> wrote in message
> news:20030911113128.438$...
>> Report Forcasts the Demise of Discs
>>
>> Video Business in Depth: DVD Growth will be replaced by VOD, Forrester
>> says.
>>
>> By Daniel Frankel 9/10-03
>>
>> SEPT. 10 | In five years, video-on-demand will represent 12% of all home
>> entertainment revenue, according to a new report from Forrester
>> Research. That will be enough for on-demand delivery to take a bite out
>> of DVD sales, reorder windows and hobble the introduction of HD-DVD, the
>> researcher predicts.
>>
>> In the report, titled "From Discs to Downloads," Forrester forecasts
>> healthy growth in consumer spending on packaged home video through 2006,
>> fueled by DVD growth. At that point, however, packaged video revenue
>> will begin a gradual decline at the hand of all forms of VOD, according
>> to the report.
>>
>> DVD's growth "will continue for quite a while, but not forever. And what
>> replaces it will not be another format. It will be delivery down a
>> wire," said Forrester analyst and report author Josh Bernoff.
>>
>> The report rests upon the premise that online piracy in the video
>> entertainment market lags only three years behind the recorded music
>> industry, which has lost $700 million so far to file-sharing, Forrester
>> says. The researcher maintains that movie studios will embrace on-demand
>> services as the best defense against piracy and develop them at the
>> expense of home video.
>>
>> The proliferation of broadband connections (30 million consumers will
>> spend $14 billion annually in 2004, Forrester says) and the widespread
>> availability of inexpensive storage devices such as PC hard drives and
>> digital video recorders are already making it easier for file-sharers to
>> swap video. In fact, 20% of the 12- to 22-year-olds that Forrester terms
>> "juvenile pirates" have downloaded a movie in the past month, the report
>> says. A quarter of these users say DVD is too expensive, and 11% say
>> they already buy fewer DVDs, according to Forrester.
>>
>> "Rather than risk the meltdown that happened in music, studios are
>> responding by embracing all forms of on-demand delivery," the report
>> reads. That extends, Forrester believes, to releasing movies at the same
>> time as DVD by 2004 and to moving the VOD release to within two months
>> of theatrical release by 2006.
>>
>> "In the next three years, cable VOD and other on-demand distribution
>> options will reduce store-based movie rental revenue by 16%," it says,
>> citing the growth of Internet and cable VOD services. Cable VOD services
>> will be in 85% of homes by 2004, Forrester predicts.
>>
>> In five years, the report suggests, "Home video rental revenue will drop
>> 37%, leaving those stores to focus on sales. But cable and satellite
>> will begin to nibble away at DVD sales by allowing permanent downloads
>> of content to PC and DVR hard drives."
>>
>> Bernoff also contends that VOD growth could result in a next-generation
>> high-definition DVD format being "stillborn."
>>
>> A number of key home entertainment executives took issue with the report
>> last week, most specifically, its aggressive forecast for rapid
>> cable-based VOD proliferation.
>>
>> Blockbuster Video officials, for example, cite recently revised Kagan
>> World Media data that suggests that cable VOD revenue will total only
>> about $2.8 billion by 2008, because cable providers will remain too
>> capital constrained to establish the infrastructure. Also, they say
>> studios enjoy too much of an advantage in margin with DVD over VOD to
>> let physical media disappear too soon.
>>
>> "We're not worried about VOD," said a Blockbuster spokeswoman. "VOD
>> continues to happen much more slowly than predicted. And when it does
>> reach saturation, we believe it will remain a nice upgrade for
>> pay-per-view because of the studios' financial interest."
>>
>> "The report's assumptions for adoption of digital delivery of movies via
>> cable and the Internet appear wildly optimistic in light of the much
>> more modest estimates of longtime industry analysts," Bo Andersen,
>> president of the Video Software Dealers Association, said in a
>> statement.
>>
>> According to Charles Van Horn, president of the International Recording
>> Media Association, the Forrester Report also fails to take into account
>> the effects of consumer education programs designed to combat piracy as
>> well as legal initiatives recently undertaken by the Recording Industry
>> Association of America.
>>
>> For its part, IRMA is predicting a 15% decline in CD manufacturing by
>> 2008 but expects DVD replication to nearly double to 2.6 billion units
>> during the next five years.
>>
>> Meanwhile, a studio official actively involved with the development of
>> HD-DVD suggested that proliferation of HD-VOD is too far out to be
>> considered. In fact, he suggested that a time of growth for
>> standard-definition VOD was a "perfect" time for suppliers to introduce
>> a next-generation physical format such as HD-DVD.
>>
>> Retailers contend that the report fails to take into account their own
>> participation in electronic distribution.
>>
>> "We see no reason why the Blockbuster brand can't be in the VOD arena,"
>> said the Blockbuster spokeswoman.
>>
>> Added an official for Borders Stores, a retailer experimenting with
>> online music distribution: "We see a day when physical and digital
>> formats co-exist."
>>
>> The Forrester report is based on data from two separate consumer surveys
>> conducted by the research concern this year with more than 6,000 total
>> participants and data from BigChampagne, a peer-to-peer monitoring
>> service.
>>
>> http://www.videobusiness.com/article...1&catType=NEWS
>>
>>
>
>

MR_ED_of_Course

I can see it now; Censorship of VOD as the tides
change. One week you'll see a movie complete, the
next, not. I hope the more thoughtful consumers will
stick with the solid formats instead of being at the
whim of the type of people who conceived DIVX and
TIVO.
-Rich

rander3127@rrogers.com

In article <>, wrote:
> I can see it now; Censorship of VOD as the tides
> change. One week you'll see a movie complete, the
>next, not. I hope the more thoughtful consumers will
>stick with the solid formats instead of being at the
>whim of the type of people who conceived DIVX and
>TIVO.
>-Rich
I cannot believ you lump Divx and TIVO together. TIVO is next to sliced bread
and butter on the cool scale.

GMAN

I have no interest in VOD.
Most people I know have no interest in VOD.

It will not replace DVD.

==============================
"Scot Gardner" <> wrote in message
news:20030911113128.438$...
: Report Forcasts the Demise of Discs
:
: Video Business in Depth: DVD Growth will be replaced by VOD, Forrester
: says.
:
: By Daniel Frankel 9/10-03
:
: SEPT. 10 | In five years, video-on-demand will represent 12% of all home
: entertainment revenue, according to a new report from Forrester
: Research. That will be enough for on-demand delivery to take a bite out
: of DVD sales, reorder windows and hobble the introduction of HD-DVD, the
: researcher predicts.
:
,,,,,,,,,,,,,,,,,,,,,,,,<<<<<<<<<<,,snip>>>>>>>>>> >>>>>>>

Richard C.

Hey! TIVO is way cool.

And DVD, thanks to HD-DVD in a few years, will be around for a LONG time to
come. The only thing that VOD could replace is your local Blockbuster Video.

JustinJStanley

Richard C. wrote:
> I have no interest in VOD.
> Most people I know have no interest in VOD.
>
> It will not replace DVD.
>

VOD is great for recording tv shows. I have recorder with my cable
service, and I use it to record Simpsons, Good Eats, Monk, and the like.
I can watch them whenever I want, can't miss them, speed through
commercials, it's great.

However, I wouldn't dream of using it for movies.

--
"Get rid of the Range Rover. You are not responsible for patrolling
Australia's Dingo Barrier Fence, nor do you work the Savannah, capturing
and tagging wildebeests."
--Michael J. Nelson

Grand Inquisitor
http://www.dvdprofiler.com/mycollection.asp?alias=Oost

Grand Inquisitor

In article <bjsut4$sce$>,
(GMAN) wrote:

> I cannot believ you lump Divx and TIVO together. TIVO is next to sliced bread
> and butter on the cool scale.

I agree. A better comparison would have been Divx and EZ-D.
--
BL

Black Locust

"JustinJStanley" <> wrote in message
news:...
: Hey! TIVO is way cool.
:
: And DVD, thanks to HD-DVD in a few years, will be around for a LONG time to
: come. The only thing that VOD could replace is your local Blockbuster Video.

============
TIVO is not VOD.

Richard C.