A new Forrester Research study released yesterday says the physical media of CDs and DVDs will drift away:
- 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.
....The Forrester report lists a number of winners and losers from the expected changes.
Among the beneficiaries are Internet portals 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.
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Article comments
1 - John Mudd
Interesting. I was telling all my friends that in 1995 and 1996 when the Internet just started to get hot, and they all said I was out of my mind. Looks like I wasn't, after all. In the 20th century intellectual property was made into something material, something tangible, but in the 21st century, it appears that it will revert back into its intellectual origin, simply so consumers can access it more conveniently. The record industry should've seen this coming in 1995 so it could dominate the market, thus, adding value to it. At this point, it's bound to lose money over the overwhelming trend to make intellectual property more disposable for convenience purposes, allowing consumers to purchase it more easily than before.
2 - Tom Johnson
I'm still not convinced that people aren't going to want a physical product to keep. It's one thing to download, for free, but I think after a while people may tire of the effort required to get what they want. Yeah, it's all out there to download, but you still have to find it, and you have to wait for it to download, and then when you finally get it, you have to make it available to yourself on some form of media - disc or Ipod, most likely. Kids have seemingly unlimited free-time with which to do all this, but as an adult, my free-time is money and if I'm sitting there doing all this, I'm really losing money. I still think people will wind up, eventually, realizing they've wasted a lot of time on intangible electronic files when they could have just paid for actual discs and artwork. At some point, someone is going to realize that paying $10 to iTunes for a bunch of lossy files and zero extras is a ripoff - because it is.
3 - Mark Saleski
i don't see this happening. maybe in more than just a few years....but certainly not in five.
kids may enjoy downloading and playing music on their computers but there are still a fair amount of people out there who care about good (if not great) sound, and the computer doesn't have much to do with that.
this is the same argument that has been made about books....it's just not happening.