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Presenting a Home Media Exclusive: Digital Drivers

23 Mar, 2011 By: Thomas K. Arnold

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.

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