Thomas K. Arnold is considered one of the leading home entertainment journalists in the country. He is publisher and editorial director of Home Media Magazine, the home entertainment industry’s weekly trade publication. He also is home entertainment editor for The Hollywood Reporter and frequently writes about home entertainment and theatrical for USA Today. He has talked about home entertainment issues on CNN’s “Showbiz Tonight,” “Entertainment Tonight,” Starz, The Hollywood Reporter and the G4 network’s “Attack of the Show,” where he has been a frequent guest. Arnold also is the executive producer of The Home Entertainment Summit, a key annual gathering of studio executives and other industry leaders, and has given speeches and presentations at a variety of other events, including Home Media Expo and the Entertainment Supply Chain Academy.
With Dish Network buying Blockbuster Inc. at auction for a bid of roughly $320 million, the digital delivery sweepstakes is about to get a lot more intense.
Dish is in a three-way battle for consumer eyeballs — eyeballs attached to bodies that want to watch first-run movies without making a trip to the rental store, the supermarket or even their own mailbox.
On one front Dish is fighting satellite rival DirecTV. Both get to offer most new releases for “transactional” viewing the same day they come out on disc. Up until now, DirecTV has had the edge, both in subscribers (19.2 million to Dish’s 14.1 million, as of the end of 2010) and in marketing. When studios began holding back hot new releases from rental leaders Netflix and Redbox, DirecTV launched a media blitz crowing about the street-date availability of first-run movies from Warner, 20th Century Fox, and Universal Studios — as did Blockbuster, before it ran out of money. Dish was conspicuously quiet.
On another front, Dish is fighting the cable companies that are scrambling to launch and improve their own premium VOD channels.
And on a third battleground, Dish is squaring off against the telecoms, who also are engaged in a continual game of streaming one-upmanship.
How can the purchase of Blockbuster give Dish the upper hand? It all depends on what Dish does with its new acquisition. And surely, but surely, there is a plan. As David Berliner, a consultant at BDO Seidman LLP in New York who specializes in restructuring and insolvency issues, told the Bloomberg news service, “It doesn’t make sense to buy a melting ice cube unless you’ve got a plan to increase revenue.”
My hunch is that Dish sees the $320 million it is spending to buy Blockbuster as an investment in its digital future. Dish didn’t buy Blockbuster for the stores, or for the inventory. Dish bought Blockbuster for the brand, and will leverage the brand to position itself as the No. 1 source of VOD. I wouldn’t be surprised it a name change, to something like the Blockbuster Movie Network, is in the future. Imagine this: “Blockbuster used to be the place where America rented its videos. Now, Blockbuster is the place where Americans watch their movies—in the comfort of their own homes. The old Blockbuster did away with late fees. The new Blockbuster is doing away with stores, vending machines and even your mailbox — so your lazy ass never even has to leave the couch.”
I jest, of course. But only in part. Rest assured that the Blockbuster brand will live on, even if the stores don’t. The vending machines — yeah, I think they’ll stay, too, considering NCR Corp. owns and operates Blockbuster Express kiosks under a license agreement. Redbox still does an awful lot of business, and this way Dish has some skin in that game, as well.
Dish may also use the fact that Blockbuster went belly-up owing tons of money to the studios to its advantage. “Hey, Warner. Hey, Paramount. Yeah, we’ll pay you. But what about those windows, eh? I know we get some movies the same day they come out on DVD and Blu-ray Disc. But it sure would be nice to get everything …”
These next few months should be interesting.
Be sure to pick up next week's issue of Home Media Magazine. It will contain one of our most important, and comprehensive, research reports yet.
In Digital Drivers, we take a look at who, exactly, is driving the transition from physical media to digital distribution, be it cable video-on-demand, Internet streaming, iTunes downloading or Hulu viewing.
If the adage “content is king” is true, and I believe it is, then it follows that the leading drivers behind the digital revolution are at the studios. Technology and digital distribution platforms are certainly key parts of the equation, but without stuff to watch on those platforms, they are little more than better mousetraps waiting to be sprung.
That’s why Time Warner CEO sneers at Netflix’s ambitious low-cost streaming plans, which at this point, due to a lack of financial incentives to the studios, don’t include any current hit movies. “It’s a little bit like, is the Albanian army going to take over the world?” Bewkes said recently in an interview. “I don’t think so."
The fact is, there’s more than a little truth behind the industry riddle, “When will digital delivery replace packaged media?” The answer: “When the studios want it to.”
Until there is a viable business model that makes sense for the content owners, they’re not going to give up on a sure thing. Sure, DVD sales are slipping, fast, and Blu-ray Disc sales aren’t playing catch-up fast enough. But until something else emerges in the digital space that generates as much or more revenue, don’t expect to see the disc disappear off into the sunset, as the VHS cassette did.
A sobering thought: Even though everyone and his brother is now downloading music, the majority of music industry revenues are still from the trusty old CD.
In truth, packaged media may never go away completely. When a viable digital distribution model does emerge that all the studios buy off on, it may be some sort of physical-digital hybrid like UltraViolet or Disney’s Studio All Access.
Regardless, our team here at Home Media Magazine spent the better part of the last three months researching, investigating and analyzing the digital distribution business and identifying the key players. We’ve given big play to the studios and independent suppliers, since they control the content. But we’ve also included the people we see as key digital drivers on the retail and technology side, the platform builders and the behind-the-scenes tech guys who are making digital distribution both possible and practical.
Give us your feedback. And if we’ve left anyone out, please let us know. I spoke with one studio executive a few weeks ago and asked him who the key digital drivers are at his studio. His response: “Good question.”
Maybe now, he’ll know.
Charlie Sheen's antics aside, entertainment news this week is dominated by a most interesting juxtaposition of the old face and the new face of the home entertainment business.
Blockbuster, for years the 800-pound gorilla of our business back when rental ruled, has been reduced to a feeble old spider monkey in the zoo infirmary. A trustee representing the Department of Justice is leading the charge to ask the court to force the bankrupt rental chain to liquidate its assets. Summit is suing Blockbuster over allegedly unpaid bills, while a Google News search this very morning found a rash of negative headlines, including "Blockbuster files notice of possible layoffs of 850 Dallas and McKinney employees," "Two of three [Racine, Wisconsin] county Blockbusters closing," "San Luis Obispo's Blockbuster video store to close April 10" and "Former Norwich Blockbuster to become bar and grill."
Down for the count? It's beginning to look that way.
Meanwhile, a fresh new face suddenly has emerged in the beleaguered home entertainment sector: Facebook, the social networking site that's made everyone's life a reality show.
Warner Bros. Digital Distribution yesterday began offering movies for purchase and rent on its Facebook movie page. Fans who “like” The Dark Knight will be able to use their Facebook credits to rent the title for 30 credits or $3. Currently, only U.S. consumers can rent movies. Warner plans to add more films in the coming months, with a purchase option promised as well (for the full story, click here).
The development prompted analysts to scramble over one another to proclaim Facebook the Next Big Thing in home entertainment. In a Financial Post story (click here to read it), Eden Zoller, principal analyst with Ovum Plc, said jumping into the nascent digital delivery sector of the home entertainment business is a "logical next step" for Facebook.
"A Facebook video/Web TV service does not exist at the moment but it is likely to do so in the near future and is a logical next step in the network’s growing service portfolio," Zoller said. "Facebook is rapidly evolving beyond its core communications focus to become a wider platform for distributing and consuming entertainment services, particularly in games. At the same time an increasing amount of online video viewing time is on social platforms, notably YouTube but also Facebook albeit to a lesser degree."
I don't think Zoller's too far off. Facebook already lets users upload and share video clips a la YouTube. The site is developing a strong mobile presence. And with the launch last year of Facebook credits, a virtual currency that at this point has a use limited to social games and the purchase of virtual gifts, the proverbial stage has been set.
As the Financial Post story pointed out, "Extending the use of Facebook credits to include access to premium content such as movie rentals will not only help Facebook achieve its goal of having sales of Facebook credits account for one-third of all revenues, but it also will help validate arguments of the virtual currency being the world's first truly global currency."
Zoller sums it up quite nicely. "These factors, combined with Facebook’s large, highly engaged user base of around 600 million members, will make it a very attractive distribution platform for video and TV services," he said. "It will also no doubt give established online video rental and distribution platforms like Netflix cause for concern."
Food for thought, certainly.
Oh, how the mighty have fallen....
The news this morning, that Blockbuster has begun an auction process that will be overseen by the once-mighty video rental chain's four top creditors, really isn't surprisingly. Blockbuster has seen its revenues hit by rivals Netflix and Redbox, both of whom effectively built better mousetraps in delivering rental titles to consumers, and last year filed for Chapter 11 bankruptcy. Since then, the chain has had trouble paying its bills, and in fact is being sued by Summit Entertainment for nearly $10 million worth of product.
We've also been hearing reports that Blockbuster is having trouble getting product from certain studios, and just last week I received a letter from a gentleman in Little Rock, Arkansas, that indicated just how dire the situation really is on the store level:
"I went into my local Blockbuster video store today and saw a big section on a wall reserved for copies of the movie Red. No copies were available, which surprised me for a Wednesday morning. I asked the store employee and she said they hadn’t received their copies yet, and she’d been told by her superiors that they didn’t know when they’d get any in. This is three weeks after the movie was released. I noticed a few other blank sections on the wall for new releases that hadn’t arrived yet. I saw this first happen a month ago with the release of The Social Network. It took over a week for this store to get their copies. I’ve been renting at Blockbuster nearly 25 years and I’ve never seen this happen before. They’ve always had the new releases on the day they were released. Any idea what’s going on?"
What's going on is this: Unless something dramatic happens, Blockbuster won't be around for much longer. Just writing this causes a lump in my throat, a burning feeling deep in the pit of my stomach. For years and years, Blockbuster not only has been the 800-pound gorilla of our industry, but it also has become a pop cultural icon, as much a part of American culture as Coke, Walmart and the iPod. I can't imagine life without Blockbuster, and as I've written in this space before I really think the chain has done everything it can in recent years to reinvent itself short of shutting down all its stores and investing the money in, say, enough computer terminals or kiosks to go head-to-head with Netflix and Redbox.
It's too late for that, of course. Netflix and Redbox both have become too entrenched for anyone to challenge their dominance in their respective sectors of the retail trade, and if either one of them fails it will be because their business model no longer appeals to the consumer--sort of the same thing that did old Blockbuster in.
Of course, the big millstone around Blockbuster's neck was its debt load, which prevented the chain from meeting the Netflix/Redbox challenge head on or even capitalizing on the exclusive availability of rental titles from four of the six majors on street date--a development Blockbuster should have marketed the hell out of but didn't, simply because it had no money.
Now, it's come to this. An auction. The creditors--all hedge fund firms, including Monarch Alternative Capital and Owl Creek Asset Management--have set the opening bid at $290 million, a fraction of what the chain once was valued at. If no bids are received by April 20, the four credits would end up owning Blockbuster.
What they would wind up doing with Blockbuster is anybody's guess. One wag on the Film School Rejects website suggested "somebody rich should scoop up this and MySpace and start a pop culture museum."
As a lifelong student of human nature — I've always preferred authors like Faulkner and Hemingway, who wrote about the human experience — I've spent quite a bit of time analyzing consumers of home entertainment. My conclusion: We are looking at three, not two, classes of consumer, each a distinct group with its own characteristics and personality traits that transcend their consumption of entertainment.
The first group, and the one that means the most to our business, is the collector. These are people who enjoy owning, and they will likely continue to buy movies on disc as long as they are available on disc. These people enjoy filing away their new purchases — invariably, either alphabetically, by genre, or a combination of the two — and show them off with pride to visitors. Collectors are the ones most likely to replace their DVD movie libraries with Blu-ray Discs and can't for the life of them understand why someone would rather rent than own, if the price is right. These disc collectors typically have shelves of hardback books and CDs in their homes as well, and continue to maintain photo albums, not trusting their hard drives or the Internet with their precious memories.
The second group is one we shall call the minimalists — and I know plenty of them. They abhor clutter, and their homes are sparsely furnished. Rarely do you see a bookcase; their music is all on their computer; and they would never think of cluttering up their homes with DVDs or Blu-ray Discs — not when they can rent them. Minimalists also were the first to embrace Netflix and streaming, and even in the old days, before DVD and the Internet, they frequented video rental stores or turned to cable and satellite for their entertainment needs. I have a minimalist friend who back when I was getting gobs of VHS screeners looked at me with pity. "I'd never want all that stuff in my house," he said. "HBO's got everything I need."
The third and last group I'll call "quick and easy." These consumers prefer the path of least resistance. If they happen to be in Walmart, buying groceries and school supplies, they'll pick up a cheap movie or two, just because it's there. Their first stop is the $5 dump bin; if, after about 20 seconds of browsing, they see nothing they like, they'll check out the new releases. They'll spend $15 for a new release its first week in stores, but not $20 the next week, when it is no longer on sale. Instead, they'll stop by the Redbox or Blockbuster Express kiosk on the way out, and rent something, anything, that happens to catch their fancy. The quick-and-easy crowd also tends to channel surf more than others; if they find something interesting, they'll stick with it, and if it's a movie, they'll watch all or part of it, even the commercials. It takes too much effort to skip through them. The quick and easy crowd doesn't value its purchases the way collectors do; walk into their homes and you are apt to see discs scattered all over the place.
As our nation ages, the first group likely will get smaller. Young people are growing up in a transitory world; they visit websites and watch YouTube videos that exist only in cyberspace and may or may not be there tomorrow. Still, this is not to say they won't become collectors as they get older, although in this world of fast-changing technology, I rather doubt it. The minimalist group will likely stay the same; I think this group, of the three, is the most unique, a class all in itself.
The biggest growth, the way I see it, will come in the quick-and-easy crowd. They have big appetites for entertainment but really don't care how they consume it, as long as it's, well, quick and easy.
And that, my dear reader, is the challenge facing studios and retailers alike: how do you attract consumers who see entertainment as just another commodity, to be selected, purchased and brought into the home without much thought or effort?
Eisuke Tsuyuzaki with Thomas K. Arnold, <i>Home Media Magazine's</i> publisher.
Eisuke Tsuyuzaki is one of those intriguing individuals who believes technology is like a ball of putty, to be rolled, kneaded, shaped and formed into wonderful new inventions we simply can’t live without. He’s considered the consumer electronics industry’s key point man in Hollywood, a man who is as much at ease navigating the hallways and conference rooms of the movie studios as he is dealing with his hardware peers on the East Coast and in his native Japan.
Tsuyuzaki is being honored as Home Media Magazine’s 2010 Home Entertainment Visionary for one simple reason: He’s on a plateau all by himself. The two bright spots on home entertainment’s horizon are Blu-ray Disc and 3D, and Tsuyuzaki, the chief technology officer for Panasonic Corp. of North America, is all over both of them.
While the high-definition format war was still raging, Tsuyuzaki was on the front lines of the Blu-ray army’s successful campaign for the hearts, minds and pocketbooks of consumers. He orchestrated partnerships with such studios as Walt Disney, 20th Century Fox and MGM on grand co-promotions and joint marketing efforts, including the very successful Disney Magical Blu-ray Tour, which Panasonic sponsored. After the format war ended, Tsuyuzaki turned his sights to mainstream America, staging a series of events at NASCAR races.
Not long thereafter, Tsuyuzaki moved on to the next technological marvel in Panasonic’s stable, high-definition 3D, and once again set out on the road to acquaint the masses with this new way to view entertainment at home. The Panasonic Unwrap 3D Tour hit malls in 14 cities in a two-week period right before the 2010 holiday season, showing off Panasonic’s award-winning line of HD 3D plasma TVs, Blu-ray Disc players, eyewear and various 3D digital imaging products, among them Panasonic’s first consumer 3D camcorder and the world’s first digital camera with an interchangeable 3D lens.
Tsuyuzaki also has built long and lasting ties to Hollywood’s creative community. One of the biggest feathers in his cap: helping forge Panasonic’s relationship with acclaimed director James Cameron and his 3D epic Avatar, the highest-grossing movie in history.
If the legendary showman P.T. Barnum were still alive, it’s a fair bet he would try to hire Tsuyuzaki, even though the 44-year-old executive is a lot more understated in his pitch. While Barnum employed bombast, Tsuyuzaki uses passion and sincerity — his genuine belief that first Blu-ray Disc and now 3D truly represents the future of home entertainment and is of immense benefit to the consumer.
I caught up with Tsuyuzaki recently at his favorite Japanese restaurant in Brentwood, his current home and one of three places where he now bides most of his time (the others are New York and Silicon Valley). We talked a little about the state of the home entertainment business, the future of packaged media and the advantages to consumers posed by both Blu-ray Disc and 3D. We also spoke about what he’d like to do in the future, once the consumer transition to Blu-ray Disc is complete and 3D establishes itself as a viable component of the home entertainment market.
“I’m fascinated by technology,” he says. “It truly is a wonderful word.”
Down the road, Tsuyuzaki says, he could see himself twisting and turning future technological advances toward such bigger world issues as climate change and global warming.
“The potential for technology to really change our lives, for the better, has never been greater,” Tsuyuzaki says.
And with people such as Eisuke Tsuyuzaki in the driver’s seat, I have no doubt that we’ll continue to see new and wondrous technological developments come along, developments that will enhance and improve our lives.
A good friend of mine emailed me an interesting article the other day he had come across on CNET, the popular destination site for all things high-tech. The article detailed the imminent closing of one of Sony's two remaining U.S.-based CD manufacturing plants, in South Jersey, a move that will put 300 workers out of a job. A Sony spokesman said the plant, which was built more than 50 years ago to produce vinyl LPs, is being shuttered because of the still-troubled economy and ever-waning consumer interest in the CD.
The zinger: The article maintains the CD is dying not just because of the iPod and the digital distribution model it represents, but, rather, illegal file-sharing, a practice born more than a decade ago when the record companies, in a series of stupid moves, opened the doors to piracy by first killing off the single, since the birth of recorded music the only available sampling mechanism other than the radio, and then jacking up the list price of the CD to as much as $21.98. When consumers rebelled and began using the Internet to share music, the record companies didn't capitalize on the potential new business model of digitally distributed music, but, rather, took to the courts to fight their own customers. Ultimately they realized their folly and took a seat at the table--but by then, a transformative mindset change had already taken place. And it is this mindset change, that music is not something that must be paid for, continues to dog the music business to this day. As the CNET story says, "innovation isn't the only reason CDs look long in the tooth. After a decade of rampant illegal file sharing, they'd argue, the plant closure is a sign that the CD just couldn't compete with free."
The home entertainment industry has handled the digital migration in a much smarter fashion--aided and abetted by the fact that consumers will be a lot slower in giving up their DVDs and Blu-ray Discs than their CDs. The reason, of course, is that consumers have always bought music by the song, not by the album, and an individual song can be downloaded in a matter of seconds. It's cheap, a lot cheaper than buying a CD (remember, no more singles!), and it's easy. Our business doesn't work that way--no one buys a movie by the scene. Downloading a two-hour movie can take a lot of time, particularly if it's in high definition--and at $12 to $20 a pop, it can be as pricey a proposition as buying a DVD or Blu-ray Disc. No wonder electronic sellthrough, as this end of the business is known, isn't exactly taking off like wildfire--there's no compelling advantage over buying a physical disc.
Streaming, of course, is another story. The segment of the population that wants to own and collect movies, I believe, was artificially inflated by the novelty of the DVD. And now that things are settling back down to normal, consumers--at least a healthy percentage of them--are going back to rental, and more and more, they're doing it digitally, either through VOD or iVOD.
This brings us back to the original premise of the CNET story: That the CD was done in by file-sharing, not digital distribution. That danger lurks in our industry, as well. Granted, the same obstacle to EST exists in the shady underground as well: it's a hassle to download and share an entire movie. But the rash of mobile and portable devices that employ much-smaller file sizes--who needs high-definition on a three-inch screen?--is something we all need to be aware of. And as download speeds become faster and faster, ultimately there will come a day when a full movie, even in glorious high-definition, can be downloaded in a matter of seconds.
We need to be ready for that day. As the CNET story says, it's hard to compete with free.
The author with the DEG's Amy Jo Smith and Warren Lieberfarb.
After spending three hours walking the convention center floor at the Consumer Electronics Show in Las Vegas this afternoon, I briefly closed my eyes and visualized a giant yellow smiley face.
This year's CES certainly won't be remembered for innovation. 3D, which was all over the place, was actually introduced at last year's show. And tablets, the other Big Deal, originated with Apple's iPad, and Apple is conspicuously absent, choosing to stage its own shindig rather than share the spoils here in Las Vegas.
But that's OK with me. The lack of innovation has lowered the pressure level on exhibitors, so instead of trying to outdo each other they're simply refining their products and having a ball while they're at it.
The Panasonic booth had all sorts of viewing stations where visitors can watch music, games, sports, movies, you name it in state-of-the-art 3D. Among all the competing formats out there, Panasonic, for my money, has the best 3D, and the company certainly celebrated its leadership position by focusing on the fun factor more than anything else. No more hard sell on 3D--just a demonstration of how fun it can be to watch.
20th Century Fox deserves kudos for using CES to announce the September 2011 release of the Star Wars franchise on Blu-ray Disc. Again, nothing really new here--we all knew the films were eventually going to be released on Blu-ray Disc--but by making the announcement here at CES 20th Century Fox brought a little bit of Hollywood to the show floor. It was, well, fun.
I also got a kick out of Smart TV, which lets you toss the remote and instead manipulate your television with a hand clap or other gesture; Casio's new line of digital cameras and online editing program that lets you turn photos into works of art ("It's time we brought some fun to digital photography," the pitchman said during the stage presentation"); and Microsoft's Windows 7 display, with demonstrations on how to use such features as Windows Live to create wonderful movies and slide shows.
I also liked the book-like cover for the Kindle, the really cool new video game chairs (including one with pockets for snacks, extra games and even the Guitar Hero guitar, so Junior never has to get up except to go the bathroom), and these caps that let you snap your smart phone under an extended brim so you can create your own little movie theater.
Fun, fun, fun.
The mood of the attendees and exhibitors, even those from the studios, also seemed remarkably upbeat, with plenty of optimism that the economy is going to get better and these fun new devices will catch on with consumers.
A few more random thoughts and observations from the show floor:
--I never would have imagined seeing so many different skins, cases and protective coverings for iPhones and iPod Touches. There were aisles and aisles of them--a whole new industry for a product made by a company that doesn't even exhibit here.
--Why are we still seeing car DVD players? Let's go Blu-ray. I know, the picture doesn't really matter on such a small screen, but there are two other compelling reasons why we should ditch DVD and put Blu-ray players in cars: 1) better disc protection (Blu-ray Discs have a protective coating, while DVDs don't) and 2) flexibility (I know combo packs have become increasingly common, but in many cases consumers still have to choose between buying the DVD or buying the Blu-ray Disc). Blu-ray turns 5 this year. By now, everyone should be onboard.
--It was good seeing Warren Lieberfarb, the father of DVD, at the DEG: The Digital Entertainment Group event Thursday night. If it wasn't for Warren, our business might not have survived as long as it has. We all owe him a tremendous debt of gratitude.
I take pleasure in answering thus prominently the communication below, expressing at the same time my great gratification that its faithful author is numbered among the friends of Home Media Magazine:
I am 8 years old. Some of my friends in the consumer media say the packaged media business is dying. DVD sales are falling, fast; Blu-ray Disc has yet to really catch on; and the whole world is moving toward electronic delivery. Papa says, “If you see it in Home Media Magazine, it’s so.” Please tell me the truth, is the packaged media business dying?
Virginia, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except what they are told. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours, man is a mere insect, an ant, in his intellect as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.
Yes, Virginia, there is a vibrant and viable packaged media business. It exists in stores large and small, by mail, in vending machines. People are still enjoying movies, TV shows and other entertainment on disc, and they will continue to do so for the foreseeable future. To be sure, they may have slowed the pace of buying DVDs, but more and more of them are switching to Blu-ray Disc and starting their collections all over again, albeit at a slower pace due to the troubled economy. Others have gone back to renting, since renting a movie, thanks to Netflix and Redbox, has never been cheaper or easier. Alas! How dreary would be the world if there were no packaged media business! It would be as dreary as if there were no Virginias. There would be no true high-definition picture, no movie theater sound, no extras, no special features, no commentaries! We should have no enjoyment, except that which we glean from our computers. The eternal light with which childhood fills the world would be extinguished.
Packaged media dying? Not hardly, Virginia. To the contrary, it lives and will likely live on and on and on. It will continue to make glad the heart of childhood, and be the preferred way of bringing entertainment into the home — and keeping it in our homes, to cherish and enjoy over and over again — for a long, long time.
(Apologies to Frank P. Church and the New York Sun.)
The barrage of reports in the press that DVD and even Blu-ray Discs are relics of a bygone era and everything's moving to the Internet would have you believe that all of us in the home entertainment business had better look for new jobs.
The 24/7 Wall St. website even went so far as to post a story on "The Five Businesses That Killed the DVD" (to read it, click here), even though two of those businesses, Netflix and Internet-enabled Blu-ray Disc players, are actually helping the disc stay alive. Despite lots of talk about streaming, Netflix is still very much a disc-based rental service, and while consumers seem to be enjoying the ability to stream movies as well, a point could be made that we won't know how deep that enjoyment runs until Netflix starts charging consumers for the privilege instead of letting them stream away for free. As for Internet-enabled Blu-ray Disc players, the whole idea of letting consumer hook up their players to the Web is to provide them with updated materials and content to supplement what's already on their disc.
It's sort of like what we're seeing in the game world: My sons, and millions of kids and young adults like them, play Call of Duty: Black Ops online, with an ever-widening circle of friends, both real and cyber. But to do so they still had to buy the disc, $650 million worth in just five days.
My point here is that while Web-based viewing, downloading and networking very well could be the wave of the future, it doesn't necessarily mean packaged media is doomed. The two don't need to be mutually exclusive.
And for those who call me an old fogey and insist "it's a generational thing," let me say this: My 8-year-old records "Spongebob" episodes from the TV and, when I'm not looking, tries to watch "South Park" episodes on YouTube. But he also covets his brother's cherished set of "Futurama" discs, housed in a huge plastic "Bender" case, and put on his Christmas list "South Park DVDs."
My two older boys, who have effectively shut little Hunter out of their lives, also enjoy YouTube and Hulu. But on weekend nights, one or the other comes downstairs and retrieves a couple of Blu-ray Disc or DVD movies to watch with his brother.
Sometimes they invite me to join them, but lately I've been declining: I'm too busy watching those wonderfully restored "Perry Mason" DVDs on the 65-inch plasma TV in our family room.
And apparently I'm not alone. We all know what a huge success Black Friday was, with consumers snapping up a grand total of more than 50 million discs, according to studio reports. Granted, most of them were purchased at rock-bottom prices, but the concept of going out and buying entertainment on a disc doesn't appear to be nearly as strange or foreign as some of these media reports suggest.
Peaceful coexistence. That's how I view the physical and digital worlds. And the moment someone proves me wrong is when I'll start updating and sending out my resume.