From DAILY FINANCE:
Netflix has released a controversial presentation that charts the quick death of the physical DVD rental industry. If the presentation bears out, then the next few years could be the most tumultuous on record for the content distribution and entertainment businesses.
The gloomy forecast comes from a company that, under the leadership of CEO Reid Hastings, is known for being open, transparent and somewhat radical in its views and management style….
But the company’s outlook for the DVD industry casts a wider net. According to this presentation, Netflix forecasts that the physical DVD business (sales, rentals via mail, store and kiosk) will peak in the next three years and begin a steep decline. The entire segment will disappear completely by 2030. At the same time, video-streaming use and revenues will soar as multiple on-demand and online content delivery platforms flourish…
Click here to read the full article.
This article assumes the existence of an ubiquitous, inexpensive, and practically limitless high-speed network infrastructure. The current Internet would quickly come crashing down if even a fraction of the people who currently watch DVDs would instead depend upon Video On Demand.
Even today, Internet providers like Comcast are either limiting Internet access to heavy volume users, or else are charging a penalty for excessive data transfers. And a DVD quality video contains a LOT of data (a typical dual layer DVD holds 8.5 gigabytes of data, while a Blu-Ray disk can store up to 100 GB).
As long as it remains significantly less expensive to watch movies on DVD rather than subscribe to the bandwidth necessary to watch HDTV quality streaming video AND pay for the hardware necessary to watch them with, DVDs will continue to dominate the home video market.
I agree but let me add that retail brick and mortar video rental revenues have declined substantially over the past few years and will continue to do so. If the investment payback is there, the network investors will continue to increase capacity, perhaps not to the point where one could watch any movie at any time any where, but nevertheless heading in that direction. While DVD technology can hold huge amounts of data, a network need only deliver a relatively small amount of data at a time to keep consumers happy with the service.