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Movie Downloads Take On DVDs
by
findingDulcinea Staff
Sony’s Blu-ray has won the DVD war against Toshiba’s HD-DVD format. But movie downloads may prove a more formidable challenge.
30-Second Summary
The Blu-ray format has defeated its competitor HD-DVD. It is rumored that Toshiba will cancel production of HD-DVD players in the coming weeks.
As defeat loomed for HD-DVD in the the DVD wars, Toshiba tried to counter its rival's popularity by offering steep discounts on players. The “hoped-for consumer sales surge never materialized,” states the Hollywood Reporter.
However, Blu-ray’s success has failed to produce the surge in DVD sales that many expected. The Sony format’s victory may only forestall the inevitable. Blu-ray now has to contend with movie downloads if it is going to escape the fate of older DVD formats and VHS.
As DVD sales fall, film studios “are scrambling to introduce an array of initiatives aimed at propping up the broader market,” The New York Times writes.
Hollywood will capitalize on the marketing opportunities of the Internet if it can conquer its “aversion to making big changes to its business model,” writes The Economist. If it fails to adapt, illegal and legal downloading sites will continue to eat into DVD revenues.
The change in methods of media consumption inspired Nielsen ratings to make plans for an “Anytime Anywhere Media Measurement” plan that would track people’s Web and cell phone use. So far, many have refused because of privacy concerns.
As defeat loomed for HD-DVD in the the DVD wars, Toshiba tried to counter its rival's popularity by offering steep discounts on players. The “hoped-for consumer sales surge never materialized,” states the Hollywood Reporter.
However, Blu-ray’s success has failed to produce the surge in DVD sales that many expected. The Sony format’s victory may only forestall the inevitable. Blu-ray now has to contend with movie downloads if it is going to escape the fate of older DVD formats and VHS.
As DVD sales fall, film studios “are scrambling to introduce an array of initiatives aimed at propping up the broader market,” The New York Times writes.
Hollywood will capitalize on the marketing opportunities of the Internet if it can conquer its “aversion to making big changes to its business model,” writes The Economist. If it fails to adapt, illegal and legal downloading sites will continue to eat into DVD revenues.
The change in methods of media consumption inspired Nielsen ratings to make plans for an “Anytime Anywhere Media Measurement” plan that would track people’s Web and cell phone use. So far, many have refused because of privacy concerns.
Headline Link: ‘Studios Are Trying to Stop DVDs from Fading to Black’
In response to a 3.2 percent drop in DVD sales last year, “the studios are scrambling to introduce an array of initiatives aimed at propping up the broader market,” according to The New York Times. One solution is to include digital files with DVDs that consumers can download and watch on their computers or iPods. Technology consultants say that digital copy will help DVDs compete with downloading sites, such as iTunes, but the competition will be stiff.
Source: The New York Times
Background: The format battle
In January, Warner Bros. pledged to release its material on Blu-ray high-definition DVDs, practically guaranteeing that the format would prevail over its competitor HD-DVD. But some argue that HD-DVD is the superior technology.
Source: findingDulcinea
Toshiba halved prices on many HD-DVD players after Jan. 15, but “a hoped-for consumer sales surge never materialized” the Hollywood Reporter stated. Now, it is rumored that Toshiba will drop the HD-DVD format altogether. In mid-February, both Netflix Inc. and Best Buy moved over to Blu-ray, sparking speculation that Toshiba will announce the death of HD-DVD sometime in March.
Source: Hollywood Reporter
Analyst Robin Harris told Forbes that Blu-ray’s success was a “pyrrhic victory for Sony.” She predicts that since many players will be able to convert regular DVDs, not many users will be compelled to buy new collections. Furthermore, downloadable movies may make DVD collections obsolete. Forbes predicts “home entertainment centers will go the way of the CD collection.”
Source: Forbes
When Apple first announced that it would offer movie downloads through iTunes, Wal-Mart was furious, already anticipating the damage it would do to the DVD industry. At the time, Wal-Mart was responsible for 40 percent of DVD sales. Wal-Mart went into negotiations with Hollywood to demand lower wholesale DVD prices so it could compete with Apple’s downloads.
Source: Business Week
Opinion & Analysis: ‘Hollywood and the Internet’
The DVD industry may be on the way out, but Hollywood can do itself a great service by incorporating the Internet into movie sales and marketing, The Economist argues. Listing several sites for illegal movie downloading, the article suggests that if Hollywood doesn’t learn to cooperate, the Internet will be its undoing. In order to make the leap, Hollywood will have to face the ire of corporations like Wal-Mart that depend heavily on DVD sales.
Source: The Economist
Related Topics: Nielsen ratings and future formats
Even the Nielsen ratings recognize that people’s online behavior may be a relevant indicator of their media tastes and habits. However, this has raised privacy concerns for many Nielsen households. A plan to track Web behavior last year was derailed because so many households refused to participate on the basis of privacy. Still, Nielsen intends to move forward with its “Anytime Anywhere Media Measurement” plan.
Source: The New York Times
According to The Economist, not only does Toshiba still have a chance of selling HD-DVD players and discs, but both formats will be wiped out in the coming years by even better technology, provided by Internet, cable and phone companies. The Economist speculates that when high quality picture can delivered through cables or thumb drives, “both Blu-ray and HD-DVD will go the way of the VHS tape.”
Source: The Economist
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