A recent The New York Times article [defunct link] published at News.com [defunct link] suggests that although DVD growth has slowed, the format will continue to dominate for many years to come despite competition from the high definition DVD formats, digital downloads, pay-per-view (PPV), and video on demand (VOD).
The conclusion was similar ten years ago when DVD’s were not expected to significantly replace VHS tapes for some time because of expensive hardware and limited content made available by the movie studios. Ten years later, the DVD format not only replaced VHS tapes in record time but it changed the entire video industry. Walmart’s booming DVD sales business, television shows offered by the season, reissue after reissue, and Netflix are just a few unexpected outcomes of the rapid transition that occurred.
There are several reasons why DVD’s defied expectations. When DVD’s were introduced compact discs had already become wildly popular. Consumers unexpectedly began watching DVD’s on their computers, prompting earlier than expected adoption. Television series were put out two episodes per disc until the first full season boxed sets became immediate successes. The price of hardware fell rapidly while other consumer electronics such as game consoles began adding DVD support.
Of all contenders for distribution of video content in the future, only digital downloads can equal or surpass DVD’s in impact. Experts argue that digital download services are handicapped by limited selection, lower resolution, and the late arrival of broadband to a significant number of consumers in many countries. However, these obstacles are rapidly being overcome, while the problems faces by competing formats escalate. The format war over high definition DVD’s has abruptly inhibited any chance for their success even as holographic disc technology poises to leap frog over HD-DVD and Blu-Ray. PPV and VOD are popular but limited to satellite and cable. By the time these services adapt to IP, digital downloads will have become the popular format of choice by both content providers and consumers.
The availability of legal digital movie downloads took off earlier this year when the movie studios began making their content available to Movielink [defunct link] and CinemaNow [defunct link]. Both companies are rapidly increasing selection, spurred on by the success of television and music videos in the iTunes music store in only eight months and the inevitable launch of an iTunes movie store. Google jumped into the fray early with a growing library of more obscure, independent, and cult classic movies. Amazon, Netflix, and Blockbuster are all rumored to be working on their own digital download services.
All of this activity has occurred in less than one year and this intense competition will lead to much more content and higher resolution video very soon. The success of the $1.99 per episode model of television series on iTunes in spite of the low resolution tailored for the small screen of the iPod with video, as well as the willingness of consumers to watch these video on their computer monitors, indicates any increase in resolution will be immediately matched by greater demand.
Broadband penetration continues to rise while speeds increase and competition between traditional telecommunications, cellular, wireless, satellite and utility companies heats up. The Internet itself, regardless of how we access it, continues to swallow traditional media whole. When consumers finally embrace the availability of all media at all times on the Internet, all other distribution methods will fade away, beginning with physical media.
Then, around 2010 when digital downloads become the preferred format for entertainment distribution, the real significant changes will begin. The Internet is already transforming into a globe-spanning computing, software, format, sensory, energy and distribution platform called the Grid. When the Grid arrives and nearly every technological device becomes a mere extension of the platform, media content will become available anywhere in the world at anytime on any device both inside and outside of our bodies. Downloading will not be necessary because content will simply be there, accessible at the speed of light.
DVD’s, digital downloads, and then the Grid. Ten years from now, every other format will be mere footnotes in history.