The prevailing mood last week’s ESCA Edge conference in Los Angeles was that digital may be the way to go, but it has a way to go, and physical media will be around for a while yet. Alison Casey, head of Global Content at Futuresource, said that while packaged media overall may be in decline, “It is not falling off a cliff. Blu-ray is very important and growing fast while Futuresource is also bullish about the prospects for3D.” Current digital business models are not appealing enough to the consumer, paid for online video has been slow to take off, and even as far ahead as 2015 digital will still lag behind packaged media sales.
[caption id=“attachment_236” align=“alignleft” width=“300” caption=“Alison Casey of Futuresource”]
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“It’s currently a high investment, low return business model,” said Casey, “and many retailers have actually been exiting that market. Digital is a totally different cost base compared with packaged media.”
Another fan of packaged media, despite announcing plans to move into the digital space, was Mitch Lowe, redbox president. Digital2Disc caught up with him following his presentation and he said, “It’s good to see that people are still interested in writing about physical media – discs will be around for a long time to come.”
Billy Law, director of Home Entertainment Measurement at The Nielsen Company, provided some snapshots of the state of the home entertainment industry for 2009 and the early part of 2010. While spending had stalled or declined a bit in 2009 (down 9%), he said, it was beginning to recover with signs that spending was growing, albeit “restrained”, and Blu-ray sales are growing, even though they are not enough to offset DVD. However, good BD sales led to March 2010 being stronger than March 2009.
Something to remember in all the facts and figures, Law stressed, was not only that “Blu-ray was launched in the midst of the worst economic downturn many of us have experienced, but DVD was the fastest-adopted consumer electronic item ever.”
In a panel about digital supply chain, panellists agreed that there is often a need to customise the supply chain for each retailer, and that makes it even more difficult in the crucial global marketplace. “There is a lack of standards in the whole sector,” said one panellist, “and that makes digital delivery inferior to packaged media. International delivery adds another layer of complication and there is a lot of redundant infrastructure and capacity.”
