An article in yesterday's NY Times does an excellent job of covering the point I was making last week. That is, the entire DVD business has a limited lifetime and Sony's Blu-Ray victory is somewhat hollow. The disc business is not a long-term business and it is already showing signs of fading.
The article discusses what the various studios are doing in an attempt to bolster the DVD and Blu-Ray business and keep it from going the way of the CD. They are trying everything from better packaging to actually providing a downloadable file on an accompanying disc so consumers can put the content right on their computers, iPods and wireless devices.
However, that last strategy relies on the fact that loading from a disc is still a lot faster than loading from the Internet. At least one executive claims that this advantage will remain for the foreseeable future. If that's true, then how come everyone is already foreseeing the day when all content will be piped directly to the consumer with no need for a disc or packaging or a brick-and-mortar retailer. Maybe no one can pinpoint the day that the speed and capacity of most consumers' Internet access will cause that technology shift to occur, but everyone can foresee the occurrence. And I maintain it is sooner rather than later.
I think we again are seeing entertainment companies struggling against inevitable technology shifts rather than embracing them and developing new and better business models. These guys have to give Who Moved My Cheese? another read. Change is inevitable and needs to be not only accepted, but pursued. Smart business people get out in front and give consumers what they want before they start switching to other vendors. The problem with the major entertainment companies is that they are still used to controlling the business and dictating to consumers. They need to get smart and embrace the commercial democracy that is created by technological revolutions.
And Blu-Ray sales will certainly pick up. As prices come down on 1080p displays and Blu-Ray players, consumers will seek and enjoy the higher quality. But that doesn't buy that much more time. Eventually, superior HD content will also be delivered over the pipeline. It is right around the corner -- maybe it's a 3 year corner, maybe a 5 year corner or maybe even a 10 year corner, but it's coming. Let's not put so much effort into denying consumers what they really want by delaying technological shifts as long as possible. Let's get out in front of consumers and figure out how to make more money by using technology to provide more quality and convenience at a price that consumers are willing to pay.
Update: Here is an article from Macworld, published last night, that makes the point even more directly, and backs it up with some emerging research.