reno
reno
Joined: Jan 20, 2010
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September 20th, 2011 at 6:15:49 PM permalink
Everyone is predicting that the DVD format is on its way out. Studio shipments of DVDs fell 43 percent in 2010. The conventional wisdom blames the sales decline on: 1) video on demand, 2) videogames, and 3) internet surfing.

Netflix has seen the writing on the wall, and this week the company announced it was splitting itself into 2 divisions. Their DVD mail rental business will be renamed Quikster and their video streaming division will retain the name Netflix. Netflix CEO Reed Hastings put it this way: "For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something - like AOL dialup or Borders bookstores - do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly."

I've used Netflix's streaming service, and it is wonderfully convenient. The problem is that the selection of titles available for instant streaming sucks. If you're looking for re-runs of Kim Kardashian's reality TV show, you'll be delighted with Netflix instant. But if you're looking for great cinema (Hitchcock, Kubrick, Scorsese, Spielberg, etc.) you'll be disappointed. This lousy selection isn't really Netflix's fault. The problem is that the studios don't stand to make much profit from the all-you-can eat buffet of Netflix streaming. They prefer a la carte pricing with fat profit margins.

In many areas of the economy, the cheapest product wins. But not always. I could rent a DVD of Matt Damon's recent movie The Adjustment Bureau for $1 at Redbox. Or I could stream it for $4 from iTunes or Amazon. The difference is negligible enough that most folks would rather pay the extra $3 for the convenience of not having to leave their living room. But I live less than half a mile from a 7-11 store with a Redbox, and the trip offers me the opportunity to stock up on movie snacks and drink, items that iTunes can't sell me. So I'm still a fan of DVDs. (I might feel differently if it was January and I was living in Minneapolis.)

So how about some predictions: how long before DVDs are as extinct as vinyl records and 8-track tapes? 10 years? 20 years? Will you miss them? I will.
Ayecarumba
Ayecarumba
Joined: Nov 17, 2009
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September 20th, 2011 at 6:51:49 PM permalink
The expansion of HD in the form of Blu Ray will kill DVD's first, in the same manner that MP3 killed CD's. BD players used to be $300+; you can now buy them in grocery stores for less than $90. No one is going to buy dvd players when you can get a HD player for your HD TV. As most dvd players are only built to last 5 years or less, I think we will see BD overwhelmingly dominate DVD in less than 7 years.

Will streaming HD replace BD as quickly? I don't know. There will always be a segment of the population that will not pay extra for high speed internet. I think it really depends on the growth of the 4G, 5G, 99G infrastructure, and the privacy protection offered by wireless streaming services. Can they price themselves competitively? Redbox killed Blockbuster.
Simplicity is the ultimate sophistication - Leonardo da Vinci
NicksGamingStuff
NicksGamingStuff
Joined: Feb 2, 2010
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September 20th, 2011 at 6:54:42 PM permalink
I thought Netflix killed blockbuster
EvenBob
EvenBob
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September 20th, 2011 at 6:54:50 PM permalink
I'm still buying VHS for my movie collection, they're
just so damn cheap on Amazon. Old movies only.
"It's not enough to succeed, your friends must fail." Gore Vidal
Ayecarumba
Ayecarumba
Joined: Nov 17, 2009
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September 20th, 2011 at 7:00:06 PM permalink
Quote: NicksGamingStuff

I thought Netflix killed blockbuster



Blockbuster adopted the Netflix model that also allowed folks to return dvd's in stores. It helped them hang on, but Redbox cut the legs out from under both of them by offering the same DVD for only $1.
Simplicity is the ultimate sophistication - Leonardo da Vinci
pacomartin
pacomartin
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September 20th, 2011 at 7:50:08 PM permalink
Quote: reno

So how about some predictions: how long before DVDs are as extinct as vinyl records and 8-track tapes? 10 years? 20 years? Will you miss them? I will.



I think you need to distinguish the DVD rental market from the DVD sales market. Personally, I have found that many of the DVD's I rent from redbox are scratched up. It is extremely annoying to watch 3/4 of a movie and then you can't finish it. There will always be a segment of the market that likes to own something tangible.

Ultimately, the problem Netflix has is that the post office is chewing up much of their profit. It would be cheaper for them to subsidize the purchase of home equipment (with free months of rentals) then to keep on paying postal fees for years. I would say that they will phase out that part of the business in five years.

But I think there will be DVD's in 20 years.
buzzpaff
buzzpaff
Joined: Mar 8, 2011
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September 20th, 2011 at 8:24:02 PM permalink
Quote: EvenBob

I'm still buying VHS for my movie collection, they're
just so damn cheap on Amazon. Old movies only.



Tell me about it. 10 years ago I made a living selling VHS on Ebay. 5 years ago I was on Amazon, Cd's Dvd's and books. Still on Amazon , forget cd's, forget dvd's, and book are not far behind. The times, they are a changing. Horse race tracks are either racinos,
ghost towns, or a new shopping center. Atlantic City is fading fast. and Las Vegas ????
EvenBob
EvenBob
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September 20th, 2011 at 8:29:53 PM permalink
Quote: buzzpaff

forget cd's, forget dvd's,



There will always be hard copies of some form, and
DVD's are it right now. They will eventually become
more compact, but they're here to stay.
"It's not enough to succeed, your friends must fail." Gore Vidal
buzzpaff
buzzpaff
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September 20th, 2011 at 8:54:55 PM permalink
Thanks Bob Now tell me what to do with my cds, cassettes and 8 tracks. And do you know where I can get that little plastic ring so I can play me 45's on my Victrola? LOL
buzzpaff
buzzpaff
Joined: Mar 8, 2011
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September 20th, 2011 at 8:55:09 PM permalink
Thanks Bob Now tell me what to do with my cds, cassettes and 8 tracks. And do you know where I can get that little plastic ring so I can play me 45's on my Victrola? LOL

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