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Disc Isn’t Dead; Kiosks Are Doing Fine

2 May, 2011 By: Stephanie Prange

The NPD Group recently reported that about 80% of consumers watched a movie on DVD or Blu-ray Disc in the past 90 days and that consumers still spend 80 cents of every home video movie dollar on renting or buying discs. Last week kiosk companies Redbox and NCR released numbers showing they are doing just fine. These developments fly in the face of naysayers who claim the disc is dead. I often reply to these gloom-and-doom purveyors, “If disc is dying, why is Redbox growing?”

Redbox doesn’t yet have a digital option. Neither does NCR’s Blockbuster Express. But they both seem to be surviving.

Another case in point is the growth of Blu-ray Disc purchases throughout the past few years. Granted, DVD sales are flagging, but the high-definition format is chugging along.

Most outside industry observers unfairly compare the current disc market with the heyday of DVD, when consumers could buy most films, including catalog hits, for the first time at an impulse price. The value was irresistible to many consumers, and they got that purchase with a better quality picture and package as well. VHS wasn’t exactly library friendly. It was bulky and deteriorated over time. That sort of windfall may never happen again, but that doesn’t mean consumers don’t like the disc.

Much of the streaming hoopla around Netflix and Hulu involves TV shows, not movies. TV DVD may be suffering a hit from that, but the TV DVD buying binge, too, was goosed by catalog to which consumers had never before had access. If you already own the entire series of “Buffy the Vampire Slayer” on DVD, you probably don’t need to buy it again. Many TV shows weren’t even shot in high definition, so buying them on Blu-ray is of little advantage.

The disc is merely a victim of its own success. Expecting consumers to buy the same movie over and over and over again has its limits, no matter how many special editions a supplier puts out.

The disc’s appeal is reflected in the growth of kiosks and Blu-ray. My bet is if Netflix turned it’s back on disc, Redbox and other kiosk companies would grow even faster. Both would coexist with Netflix streaming mostly old catalog fare and TV shows, and kiosks renting top hits, some earlier than Netflix and at a higher price. Videophiles who really want to see Avatar in 3D or hits like Tron at home would buy them.

Many industry pundits have said the disc will stick around for a long time as home entertainment options grow. Recent numbers back that up.


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