Originally Posted by HockeyoAJB
I don't debate your statistics to date. However, I strongly disagree with your conclusions. You seem to believe that the double digit declines will continue or even accelerate until physical media sales are zero.
I'm confident double digit declines will continue (more or less). That doesn't mean sales get to zero soon because 10% of a smaller number implies a slower decline unless the percentages grow, which I'm not projecting.
Likewise, you seem to imply that streaming will continue to grow at a rapid pace, equaling what streaming + physical media combined currently bring in, in less than 5 years.
Again, not what I'm saying. Streaming will continue to grow (mostly Netflix/Amazon Prime/new services that haven't launched, less so single-purchase/rental which will also grow, albeit more slowly). But I think it's pretty naive to believe to believe that physical media has "legs". You should really look at the collapse of physical music sales (outside the LP nostalgia realm, which actually remains tiny... and see below). There is a high likelihood that the decline of DVD will accelerate in the coming years. There is no reason to believe BluRay will supplant people that begin to exit DVD. And none of those DVD people are UHD BluRay customers.
I just don't see that happening. I am willing to bet that in the next year or two, sales of physical media will start to level out.
Let's take that bet. You're calling for what, exactly?
Meanwhile, the rate of growth for streaming will begin to slow. It's inevitable. You can't go higher than 100% market penetration (something Netflix feels it is already close to achieving in the U.S.).
It does not believe that at all. And it's actually at about 1/3 of US households right now, so it's really nowhere near the cap. Netflix has a strong ability to cut down on account sharing, raise prices and get more content. Never mind that Amazon has 40+ million Prime households, the vast majority of whom probably don't even realize there is a free video service.
You will never convince everyone to give up physical media, entirely. Even if forced to do so, (should content providers choose to stop selling physical media), you will not convince all consumers to spend the same amount of money they would have on physical media, on digital delivery instead.
Right, which has hurt the music business to a point, but only to a point. It's smaller, but it's also different. And eventually more and more people will sign up for Spotify and Apple Music and the like.
Bottom line is that both physical media and digital delivery are here to stay. If the studios didn't believe that they wouldn't have agreed to invest in a new format at this point. There is room for both, just as there is room for both fast food and expensive sit-down restaurants.
The studios have done a lot of things that don't work. There is "room" for physical media, but it's nothing short of head-in-the-sand to look at what's happening and pretend physical media isn't dying. How much would it take for you to believe it's dying if 1/3 isn't enough? 1/2? 2/3? Because those milestones are coming. Certainly within 5 years we can bet that physical media will be below 1/2 its peak. Quite likely it will be down 2/3, but we'll see. And let's fast forward to 2025. What portion of millennials do you think will ever buy discs? 5%? 10%? It sure as heck ain't 50%, yet something like 80% of Gen X has bought a DVD, maybe more.
Originally Posted by N8DOGG
There will always be psychical media. Shouldn't Cd's be dead? I guess you can tell the 121 million sold this year that they are all idiots lol.
Its still huge business selling discs and will be for quite a while yet.
Please look at the chart I'm linking below. It's the music business. You can see CD has very nearly re-traced its entire curve from zero back to zero.
Inflation adjusted, CD is down from $18B to less than $2B
As for that exciting 121 million, here's the past 15 years again....
2001: 712M (-18)
2002: 650M (-62)
2003: 636M (-14)
2004: 651M (+15)
2005: 599M (-52)
2006: 553M (-46)
2007: 449M (-104) !!!
2008: 361M (-88)
2009: 295M (-66)
2010: 240M (-55)
2011: 224M (-16)
2012: 193M (-31)
2013: 165M (-28)
2014: 141M (-24)
2015: 121M (-20)
Now, I know what you're going to say: "See the declines are slowing." But are they? Here's the last 7 years in %ages.
19.5%, 18.3%, 18.6%, 6.7%, 13.9%, 14.5%, 14.5%, 14.3%.
So the declines were
worse before, but they seems to have settled into a pattern of remarkably negative consistency that is evaporating about 1/7th of the market every year. The cool thing is that if the trend continues, even 10 years from now there's a market that someone might well satisfy. Of course, that market could be as small as 25M units or so. That's about $500M even if prices get pushed up. That's 4M Spotify subs by a time when the U.S. alone likely will have 50M or so subscription music customers (if not more, though expect family plans).
So while on the one hand I don't think the CD business necessarily goes away, I think it's easy to do a sensitivity analysis on these curves and figure out how little it matters 5 or 10 years out. And in no scenario can it be said to matter much.
Physical movie media is, fortunately, bigger than physical music right now. But it's arguably more vulnerable to more rapid declines. CD music still is state of the art. DVD movies are already not. BluRay soon won't be. Most of those customers will never migrate to UHD BluRay.
None of this means UHD BluRay can't carve out a niche, but it's a niche that is far more precarious and far less a given than many of you believe. Have you shopped for Laserdiscs lately? Or your favorite movie on VHS? Or an 8-Track? Formats die. Lots of them.
CD had close to two decades to grow before it started to die. DVD had a solid decade plus. BluRay had maybe 5 years before it started to decline. The times they are a changin'.