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The importance of DVDs to the entertainment industry will decline significantly over the next few years, predicts a study from research firm In-Stat.


Physical disc sales, which includes both DVDs and Blu-ray discs, are expected to decline by $4.6 billion between 2009 and 2014, In-Stat said today. Over that period, DVD sales are expected to plummet. At the same time, Blu-ray sales are expected to climb--but not enough to make up for the decline in DVDs.


In place of physical discs, streaming content and digital downloads are quickly gaining steam. In-Stat said that the video-download and streaming revenue is expected to grow from the $2.3 billion it generates now to $6.3 billion "within five years."


"Video disc rentals will continue their significant decline," In-Stat principal analyst Keith Nissen said in a statement. "The convenience and utility of the online offerings are simply too compelling."


In-Stat also examined the impact streaming could have on the television business. According to the research firm, download revenue of U.S. television programming is expected to "more than triple" between 2010 and 2014. Moreover, the company said that video-on-demand subscription revenue could hit $3.5 billion by 2014.


The streaming space is quickly becoming a key battleground for several prominent companies. During his announcement of the Apple TV device earlier this year, Apple CEO Steve Jobs said his company found that consumers are more interested in streaming content than storing it on the set-top box. Apple currently allows people to rent television shows and movies from the Apple TV, as well as stream music and video from their computers. The device has no internal storage.


Netflix, arguably the most notable player in the streaming market, is a vastly different company than it once was due to the changing entertainment landscape. On the company's third-quarter earnings call, Netflix CEO Reed Hastings said his company is "now primarily a streaming company that also offers DVD-by-mail."


Of course, Apple and Netflix are by no means alone in the digital-content market. Their competitors include Hulu, Amazon.com, and Vudu.



Read more: http://news.cnet.com/8301-13506_3-20...#ixzz183Dhp6my
 

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This is going to be a fascinating few years. The cable companies are going to see one half of their business start to slide precipitously. What is interesting is the fact that they are also the predominant bandwidth providers. If an an age of net neutrality they are going to watch service providers not only disrupt and destroy their business model, but use their own infrastructure and product offerings to do it.
 

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Quote:
Originally Posted by Ironlight /forum/post/19646739


The cable companies are going to see one half of their business start to slide precipitously.

I don't see this happening anytime soon. Netflix (and others) will still be making content deals however I think the studios are now looking at the Internet (including Netflix) in a different light. Several studios have been very vocal how previous deals have all but given away their content and it isn't going to happen any longer.


Previously I think they saw online content as additional revenue they wouldn't have gotten any other way (outside of marketing which I think was the real goal for TV content). Now they are concerned about devaluing their content and losing revenues from the other delivery methods. With this in mind I think newer content will dry up (availability and pricing) such as the increased windows for movie releases.


Throw in live programming such as reality shows, sporting events and online isn't going to put a large dent in anyone anytime soon. As I have "cut the cord" twice I'm not saying there won't be growth in online streaming rather it's not even close to going mainstream rather it's in no position to compete against the other mainstream delivery systems regarding content and if and when it can I expect the pricing structure to meet or probably exceed the others if you compare apples to apples.
 

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I don't see a huge decline in cable/sat services either. But I do see less ppl getting the "premium" channels. Now if netflix can stream espn 1 and 2, and gets the NBA package, cable/sat companies would be in serious trouble. Reality TV is no big deal as the major ones can be watched OTA for free.
 

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Funny in that I love the premium channels more than the basic ones--the Showtime and HBO series like Boardwalk Empire and Dexter. Right now there is no perfect way to watch what I want to watch. I am interested to see what Netflix does as it moves away from disc by mail to streaming. Right now I am really not happy with what they offer for streaming since the movies are not the newest nor are their TV shows--not yet anyway. I'm sure one of them will figure it out--but for the newest in movies and TV shows, Amazon seems to offer the most--but at a price. The future is certainly streaming, and it will be interesting to see how we get there--and how long it takes.
 

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I think the issue is not so much DVDs and movies, it's whether I want my content synchronously or asynchronously. Do I want it when the cable company tells me that it's available or when I want it? The DVR is in many respects an antiquated hack at this point. Why am I paying hundreds of dollars for a box and $14/month (TIVO) just to record the crap that is on when I can't watch it.


The movie companies and streaming distributors will figure out pricing models that work. It's in their best interest to and it will lead to more revenue for the studios. Less friction means more viewer hours. It's just a matter of figuring out how to monetize it.


And I'm not saying that cable television is going to disappear in the near future. But there is a hugely disruptive technology that is about to turn it on it's head and it's going to be extremely entertaining to see what happens. I think it's going to rapidly evolve into "everything everywhere" as far as the availability of content is concerned. What form that takes and who the winner are, too early to tell but it will be a fun horserace and I'm fairly convinced the consumer is going to benefit.
 

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I think there are many issues. Just a few...

Network affiliates - How do you replace all of the local revenue generated by and for the affiliates and networks.

Studio revenues - These come from the content providers not viewers. Fresh (first run) content is wildly more valuable than everything else. Allowing time-shifting by default lessens its value which greatly decreases revenues. Removing the live premiere on your local affiliate is like not having an opening weekend for a movie.

Revenue neutral - Whatever happens the revenues will need to equal or exceed what's in place. The more distributed (freely available) content becomes the more fragmented viewing will become which will lead to higher rates to recoup the loses.


If streaming has the potential to replace anywhere close to the current delivery systems I think you would see exclusive content available online. Let's see someone create their own channel or even a single show that draws rating remotely close to the other methods. While generating the same level of revenues...
 

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Quote:
Originally Posted by Charles R /forum/post/19650094


I think there are many issues. Just a few...

Network affiliates - How do you replace all of the local revenue generated by and for the affiliates and networks.

Maybe you don't. And that is the tail wagging the dog anyway. It's not like the local networks are going to stop the evolution of content delivery. I think the bigger question is how much value do viewers put into local news and programming. It is dropping steadily and in turn localized content and services are on the internet are improving. Is it your nightly news? No, not today.

Quote:
Originally Posted by Charles R /forum/post/19650094

Studio revenues - These come from the content providers not viewers. Fresh (first run) content is wildly more valuable than everything else. Allowing time-shifting by default lessens its value which greatly decreases revenues. Removing the live premiere on your local affiliate is like not having an opening weekend for a movie.

Again, there is not a lot that the studios can do about this. If there is a steady migration away from premium channels the studios willl need to retool their video release business model because that is not where the viewers are. Again, I'm not saying in two years this will be a done deal. But the direction is clear. To quote from a new article in a different thread:

Quote:
The proposed system represents a twist in an ongoing debate over the future of "release windows," the practice of staggering the distribution of movies through different channels to maximize profits in each. Traditionally, that has meant a movie hits theaters first, followed several months later by DVDs, video-on-demand, subscription-cable channels, and so on.


The windowing system has already come under pressure amid plummeting DVD sales and rising digital piracy. And consumers have grown accustomed to receiving entertainment content more readily than they used to.

Quote:
Originally Posted by Charles R /forum/post/19650094

Revenue neutral - Whatever happens the revenues will need to equal or exceed what's in place. The more distributed (freely available) content becomes the more fragmented viewing will become which will lead to higher rates to recoup the loses.

I think what has happened in the music industry is a good proxy for this. Yes there are differences in market dynamics but again I don't think saying "the revenues will need to equal" recognizes what is driving change in the market. You make it sound like the movie studios will actually get to choose how this unfolds. That is pretty optimistic thinking.

Quote:
Originally Posted by Charles R /forum/post/19650094


If streaming has the potential to replace anywhere close to the current delivery systems I think you would see exclusive content available online. Let's see someone create their own channel or even a single show that draws rating remotely close to the other methods. While generating the same level of revenues...

You will. There are already web-only shows and they are growing extremely quickly. While they are a long way from equaling broadcast programming in reach and revenues, they are exponentially farther along than they were even two years ago.


Consider that by next year you likely won't even be able to buy a TV that is not networked. And consider why it has taken as long as it has. The various interests in the ecosystem did not want to open it up to the "wild west" of the internet. Set manufacturers did not want their hardware getting viruses and content providers did not want to open the walled garden. Well that wall is coming down quickly and I don't think that the movie studios or the content providers are in the driver's seat for much longer.
 

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I don't know about that. The studios, networks and cable/sat cos are aware of the netflix threat. They have deeper pockets than netflix too. Thus it will become more expensive for them to get streaming deals. I predict netflix may have to implement a 30 second non-skippable ad to cover rising license costs.

Quote:
Originally Posted by Ironlight /forum/post/19650191


Well that wall is coming down quickly and I don't think that the movie studios or the content providers are in the driver's seat for much longer.
 

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Quote:
Originally Posted by Ironlight
Well that wall is coming down quickly and I don't think that the movie studios or the content providers are in the driver's seat for much longer.
No license, no access. If you stream content without a license then be ready to pay big time. The studios were smart and maneuvered Netflix right were they want them (licensed streaming). You may as well get ready to pay more for Netflix streaming.
 

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^ I don't think anyone expects the price of streaming to remain as it is now. I'm somewhat surprised it's still the same as it has been. I expect to see a streaming increase early next year, or even a complete pricing/plan overhaul focused more on streaming with discs being "extras" which would be more in-line with their Netflix-is-a-now-a-streaming-company philosophy.


Of course, much depends on how much the studios push back at Netflix. They hate people getting their content conveniently at reasonable prices through legal means
 

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Quote:
Originally Posted by Wendell R. Breland /forum/post/19652305


Very few in the content creation business (me, now retired) share your views. As a consumer you want a nonessential product for nothing, as a wage earner (assuming you work for a living) you want top dollar for your services. Hypocritical?

No, I want a non-essential product at a reasonable price (not sure where you read "for nothing" at in my post).


What is considered "reasonable" varies from person-to-person obviously, but where films are concerned, $6 for a view with a 24 hour window is too high for me, which is why I only use a VOD/PPV/Zune/Vudu title here and there. $6 might be reasonable to someone else of course.


I have said before I would be willing to pay upwards of $40-50/month for a buffet plan (like Netflix) if the quality was similar to Vudu/Zune and had newer releases. But with my consumption (20-30 movies a month), I am not willing to pay ~$120-$180/month for using Vudu/Zune at $6/movie.


As it is though, I feel my $23.99 for 3 discs with Blu-Ray and streaming is fair. Actually, I think it's cheap for what I get which is why I did not complain about the recent price increase.
 

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Quote:
Originally Posted by mproper /forum/post/19652350


No, I want a non-essential product at a reasonable price (not sure where you read "for nothing" at in my post).


What is considered "reasonable" varies from person-to-person obviously, but where films are concerned, $6 for a view with a 24 hour window is too high for me, which is why I only use a VOD/PPV/Zune/Vudu title here and there. $6 might be reasonable to someone else of course.

It is reasonble to me but only if the quality is there such as it is with Vudu. When it's upwards of $12 per person to see a film in the theater, $6 for a couple or family at home seems fine. Would I like it to be less? Sure I would but I don't think $6 is unreasonable at all.


I have little to no desire to own movie content. The argument is very different when it comes to music where I want to own physical content, the disc, cover art, liner notes, etc. AND have the best quality available to me. So I can understand it might be the same for people who want to own movies but for me a 24 hr window is plenty, heck a 2 hr window would be fine for most of em as when I watch something on demand, I watch it - I don't need it the next day for anything.
 

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The thing with the 24 hour window (even though it's rarely an issue for me personally) is the falling asleep or being interrupted and not being able to finish it thing.


For example, I usually watch a movie around 9:00 (after the kid is in bed). If I start a movie at 9, but fall asleep or get called to work (I am frequently on-call), I can't finish it at 9 the next night because the window is over. I know it's been mentioned before even a 30 hour window would be better.


Again, it's rarely a problem for myself personally, but has come up and is frequently mentioned by others.


And no, $6 is not that bad. It's just the bulk-usage thing. As I said, I watch a lot of movies, so $6 x 20 or 30 movies per month is cost-prohibitive. That is why I primarily use Netflix supplemented with the occasional Zune or Vudu title or Redbox even. Even 4 movies a month pushes it to the same cost as Netflix is (I pay $23.99/month for that with 3 discs+BD).


Obviously each person will have their own opinion on that.
 

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Quote:
Originally Posted by Ironlight
And that is the tail wagging the dog anyway. It's not like the local networks are going to stop the evolution of content delivery.
I think affiliates to a large degree give content its high value. Without them it would be much less valuable which is why you don't see studios trying to deal them out.

Quote:
Again, there is not a lot that the studios can do about this. If there is a steady migration away from premium channels the studios willl need to retool their video release business model because that is not where the viewers are.
Up until now online services haven't proven they can support mainstream content at all. What new content is available online (only) and has revenues that even approach the other delivery systems? None that I know of.

Quote:
I think what has happened in the music industry is a good proxy for this. Yes there are differences in market dynamics but again I don't think saying "the revenues will need to equal" recognizes what is driving change in the market. You make it sound like the movie studios will actually get to choose how this unfolds. That is pretty optimistic thinking.
I think the music industry isn't a mirror to video for a number of reasons. The studios are already controlling the situation by introducing longer windows and refusing to give content away for next to nothing. Also illegal downloading doesn't have nearly as much power. Viewer demographics and live programming greatly reduce the attraction for old content.

Quote:
There are already web-only shows and they are growing extremely quickly. While they are a long way from equaling broadcast programming in reach and revenues, they are exponentially farther along than they were even two years ago.
This I don't buy at all. Online viewing rounds to zero percent when you are talking about daily first run viewing (the valuable stuff). Even what growth there is is based on free and undervalued content. The moment you place a price on it so it can be the only delivery method watch how fast it grows.

Quote:
Consider that by next year you likely won't even be able to buy a TV that is not networked. And consider why it has taken as long as it has. The various interests in the ecosystem did not want to open it up to the "wild west" of the internet. Set manufacturers did not want their hardware getting viruses and content providers did not want to open the walled garden. Well that wall is coming down quickly and I don't think that the movie studios or the content providers are in the driver's seat for much longer.
The movie studios and content providers have 100% control. The Internet is worthless without content.


To make endless points end I think...


- Illegal downloads won't control how the system changes.

- Content providers won't end up with less money if delivery switches to online.

- Viewers will pay more for less content. Sure some may pay less but their content will be greatly reduced and not reflect mainstream viewers.

- Up until now online viewing has been given a free or greatly devalued pass. The moment it has to compete with the current methods it will be just as hated... as the satellite/cable providers. Most people will be wishing things were as they used to be.
 

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Quote:
Originally Posted by mproper
Of course, much depends on how much the studios push back at Netflix. They hate people getting their content conveniently at reasonable prices through legal means
This is true. I'm shocked Netflix was able to get studios to agree under license to let them stream movies on demand from the old libraries without a "pay per play" or "purchase" being forced. The studios traditionally have been gougers of consumers for everything they can get them to pay.
 

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^^


Unfortunately Netflix seems to be the exception to the rule and as much as I would like more to offer that--like Amazon--it would seem the studios won't want to go down that path again--especially when they can get a premium for each movie or TV episode. So I have to wonder (and possibly doubt) that Netflix will ever be able to develop current content via streaming.
 

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$4 is my limit for HD rental..thus I have never watched a PPV movie off of zune. Netflix may have to adopt a more expensive tier or non-skippable ad for newer HD streaming.

Quote:
Originally Posted by mproper /forum/post/19652350


What is considered "reasonable" varies from person-to-person obviously, but where films are concerned, $6 for a view with a 24 hour window is too high for me, which is why I only use a VOD/PPV/Zune/Vudu title here and there. $6 might be reasonable to someone else of course.
 

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Quote:
Originally Posted by Ironlight /forum/post/19650191


You will. There are already web-only shows and they are growing extremely quickly. While they are a long way from equaling broadcast programming in reach and revenues, they are exponentially farther along than they were even two years ago.


Consider that by next year you likely won't even be able to buy a TV that is not networked. And consider why it has taken as long as it has. The various interests in the ecosystem did not want to open it up to the "wild west" of the internet. Set manufacturers did not want their hardware getting viruses and content providers did not want to open the walled garden. Well that wall is coming down quickly and I don't think that the movie studios or the content providers are in the driver's seat for much longer.

x2 the web is slowly gaining quality content once they show it can be profitable I don't think it will be long before other content creators start choosing to market directly to Netflix/appleTV/Hulu to be directly distributed over the internet rather than entering into contracts with the networks.

http://www.watchtheguild.com/
http://www.twit.tv/

http://revision3.com/
 
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