NY Times: "For a Thrifty Audience, Buying DVDs Is So 2004" - High-Def Digest Forums
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Old 11-23-2008, 05:54 PM
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Default NY Times: "For a Thrifty Audience, Buying DVDs Is So 2004"

Basically, the article says that the current economical hardship forces people to search for cheaper media platforms, which are download and streaming.

For a Thrifty Audience, Buying DVDs Is So 2004

By BROOKS BARNES
Published: November 22, 2008

LOS ANGELES

MATTHEW BOWERS, of Chicago, has been paying to have HBO piped into his home every month for nearly two decades. He tunes in for the occasional episode of “Entourage” and every couple of months orders a movie on demand. Recently, the whole family watched “Sweeney Todd: The Demon Barber of Fleet Street.”

But when his company laid him off in September, he started to think about the value he was getting out of the premium cable channel. “It’s ridiculous to pay for this service I rarely use when I can get the same stuff online and save a lot of money,” he said. The result? HBO is losing a customer.

Does an economy in tatters slow down or speed up the shift to watching TV shows and movies on the Web and mobile devices? The entertainment industry doesn’t like the answer that is rapidly becoming clear: A global economic crisis almost certainly means a sharp acceleration in the move to new ways of consuming content, setting the stage for a new clash between consumers and studios.

Historically, the movie factories haven’t been terribly afraid of tough economic times. In fact, they have almost welcomed them. During the Great Depression, people continued to turn to the movies for escape. VHS rentals boomed during the recession of the early 1980s, while DVDs got a boost from the downturn earlier this decade.

And an HBO spokesman said he was sorry to see Mr. Bowers go, but he dismissed the notion that many other people would be joining him. “No industry is recession-proof, but pay television has performed very well in previous downturns,” said the spokesman, Jeff Cusson.

But the current gloom has the Hollywood establishment rattled. DVDs are now where the industry makes its money, and Nielsen VideoScan reported a 9 percent drop in DVD sales in the third quarter over the quarter a year earlier — before the economy ran into a buzz saw. In television, crucial car advertising is drying up.

Moreover, consumers now have cheaper ways to see movies and TV shows. Hulu. Vudu. YouTube. Netflix. Amazon Video on Demand. iTunes. Crackle. FunLittleMovies.com. Movielink. CinemaNow. The list goes on. As a result, movie and television studios seem more intent than ever on protecting their established businesses from cannibalization by new media, which are growing rapidly but still generating very little revenue comparatively.

Warner Brothers Television, which supplies “The Mentalist” and “Eleventh Hour” to CBS, recently asked the network to pull full-length episodes from its Web site, along with the comedy “Big Bang Theory.” The thinking is that they were potentially too hurtful to old-fashioned syndication sales to television stations down the road.

Metro-Goldwyn-Mayer’s recent deal with YouTube to stream full-length movies and TV episodes did not include any of the studio’s prize assets like the James Bond movies or “Rocky.” Instead, MGM is giving YouTube movies like the flop “Bulletproof Monk” and reruns of the original “American Gladiators” series — a safe deal for this stage of the game. (MGM says that more-sought-after content will follow, and notes that it has been one of the more aggressive movie studios when it comes to disseminating content on new platforms.)

Studio experimentation in digital distribution is going by the wayside, too. When DVD sales were booming a couple of years ago, for instance, companies could afford to stream a TV show here and a movie there. But with operating income at 20th Century Fox down 31 percent in the recent quarter over the year-earlier period, and Walt Disney Pictures down 42 percent, studios are newly afraid.

“The days of studios making little digital deals so they can put out a press release and look enlightened are over,” said Steve Mosko, the president of Sony Pictures Television, who also oversees digital distribution of Sony films. “The days of making this a real business are here,” he said.

The problem is that consumers are clamoring for the product even if it doesn’t make money for the studio. “I see people demanding an enormous acceleration in professionally produced Web and mobile video,” said David van Eyssen, an independent film producer who recently signed a production deal with Paramount Digital Entertainment. “The low-cost alternative to traditional media is the Internet.”

A JupiterResearch study, released in late September, asked consumers how the troubled economy would affect their media spending habits. Among adults ages 25 to 34 — the group of young adults cherished by media companies — movie tickets and premium cable channels were the first to go. The last was broadband.

Think nobody wants to watch a two-hour movie on a computer or hand-held device? When “Iron Man,” starring Robert Downey Jr., became available on iTunes in late September, it sold more than $1 million in $2.99 downloads in its first seven days of release, analysts say. That’s almost pure profit, because the cost of delivery is so low, analysts note. But it’s still a drop in the bucket compared with the $140 million in DVD revenue that “Iron Man” racked up in its first week.

“We’ve been pleasantly surprised at how much revenue is starting to come from sites like Hulu,” said John Sloss, an entertainment lawyer and founder of Cinetic Rights Management, a firm that helps independent filmmakers distribute their work on new platforms.

Not all studios are circling the wagons. Sony, for one, increasingly believes that new and old media businesses are complementary. “When TV came along, people thought it would ruin movies, but it didn’t,” said Mr. Mosko. “It’s the same situation here. These businesses can coexist.” (Sony, of course, makes a lot of money from digital devices.)

Most media companies are in a tighter spot. But James L. McQuivey, an analyst at Forrester Research, predicts that any renewed efforts by studios to dig in their heels will be futile. “At this point, slowing down the flow of movies and TV shows to new platforms would be a little bit like cutting off a drug from a junkie,” he said. “People want more, more, more.”
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Old 11-23-2008, 06:03 PM
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$1 million digital vs $140million+ for physical

5 years and no real traction or downloads yet....
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Old 11-23-2008, 06:27 PM
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Quote:
Originally Posted by searock View Post
Basically, the article says that the current economical hardship forces people to search for cheaper media platforms, which are download and streaming.

For a Thrifty Audience, Buying DVDs Is So 2004
That's funny - I dumped premium cable back IN 2004.

Got my first HDTV in 2003, and with HD box & channels and internet, Cox cable Las Vegas had me up to around $110 / mo. The Hollywood Video store a couple of blocks away started their unlimited rentals for $15 / mo. and said "screw this!". Dropped the cable down to basic cable for $9.95 and still got the local channels in HD as they were unencrypted, and watched rental movies.

When I moved to outside of Tucson in 2005, satellite was the only option, or so my neighbors told me. I went with Dish; they had me at over $50 / mo for the most basic SD channel package, plus HD package. I was shocked to find that all the local/network channels were only in SD, and looked like crap on my 57" TV.
I did some research (antennaweb.org), and went with a large roof mounted antenna and got the Tucson channels in crystal clear HD. I'm not much of a TV person - maybe 10 hours /wk., except during football season - but found when I did watch TV, 90%+ of the time I was watching it off my antenna. So, as soon as the Dish contract was up, I gave them the boot.
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Old 11-23-2008, 06:27 PM
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Optical is done, face it and move on.
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Old 11-23-2008, 06:34 PM
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Don't think so...

Quote:
http://www.afterdawn.com/news/archive/15430.cfm

Sorry digital downloads, physical media is still king
17 September 2008 15:31 by Andre

According to a new NPD Group study, physical media is still king despite the flat growth of standard definition DVD sales, and digital downloads will continue to lag behind.

The report says the average U.S. consumer will spend 80 percent of his entertainment budget on buying or renting physical media (DVD, Blu-ray) and that only 0.5% of the average American's entertainment budget is spent on digital downloads (full downloads, streaming of movies or TV).

The results were based on answers from 11,000 consumers and was presented yesterday at the DisplaySearch HDTV 2008 conference in LA.

“Everyone is guessing when video on demand (VOD) and digital downloads will spell the end for packaged media,” said Russ Crupnick, senior industry analyst for entertainment with The NPD Group. "At this point, digital video is still an extremely small part of overall consumer entertainment spending."

To get more specific, the report showed that of of money budgeted for movies and video, 41 percent was spent on purchasing DVDs/Blu-rays, 29 percent was spent on DVD rentals (most notably Netflix), 18 percent was spent on going out to the movie theaters, while the remaining percentage was spent on buying TV boxsets on DVD/Blu-ray.

How did the average consumer watch a full-length movie in the past three months? 67 percent watched a DVD/Blu-ray they already owned, 50 percent rented, and 18 percent opted for Video-on-Demand. Only 2 percent paid for a digital download from services such as iTunes or Amazon VOD.
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Old 11-23-2008, 06:36 PM
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Originally Posted by Citizen Erased View Post
Optical is done, face it and move on.
But yet it wasn't "done" last year when you were buying up all of those HD DVDs, huh?

Hypocrite.
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Old 11-23-2008, 06:37 PM
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Oh, and this Brooks Barnes character is also the NYT writer who put out the other article in this thread:
http://forums.highdefdigest.com/high...-comments.html
What is this guy now the optical commentator for NYT?

Two articles in a short time frame commenting on the "downfall" of optical media? Whats the deal?
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Old 11-23-2008, 06:38 PM
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I'll take these odds.

Quote:
http://www.hollywoodreporter.com/hr/...928a5430db60b2

***
Study finds that users prefer discs to streaming 10-to-1
By Thomas K. Arnold
Nov 14, 2008, 12:05 PM ET

Blu-ray Disc's prospects appear bright despite slower-than-expected sales attributed in part to the down economy.

An independent study found that HDTV owners familiar with Blu-ray favor the format over downloading and streaming by a margin of nearly 10-to-1, with about 70% of respondents citing the fact that there's a physical disc to keep as a key factor in their decision to buy Blu-ray.

The study, conducted in the fall by market research firm SmithGeiger on behalf of DEG: The Digital Entertainment Group, surveyed more than 1,100 HDTV owners in the U.S. and 500 in Japan and 500 in the U.K.

Respondents were asked to share their views on various forms of HD media, including digital downloading, streaming and Blu-ray.

The study found 96% of Blu-ray users are familiar with downloading and streaming services, but that two-thirds believe watching a movie on Blu-ray is a better overall entertainment experience. Nearly nine out of 10 Blu-ray users said they would likely recommend the format to potential buyers.

The survey also found that 28% of HDTV owners already own at least one Blu-ray Disc player, either standalone or PlayStation 3. By significant margins, these Blu-ray owners say the packaged media format beats both DVD and VOD in picture quality, sound quality and extras. Blu-ray even received high marks for title availability, a testament to the Hollywood studios' concerted push to release high-profile product on the format. According to the DVD Release Report, there are now more than 1,000 Blu-ray Disc titles either already in stores or in the pipeline.

The DEG findings are contained a white paper report, "HDTV Owners: The Prospects for High Definition Media," that was presented Friday to media and analysts in Los Angeles.

At that presentation, Chris Lang, senior vp of SmithGeiger, said he is surprised at Blu-ray's strong showing, noting that he had initially expected digital downloading and streaming to fare better. But primarily because of the superior picture and sound of the high-definition packaged media format, he said, "even younger groups are tending toward Blu-ray."

The DEG's Amy Jo Smith said Blu-ray Disc software sales are rising fast, and the format just celebrated its 2 million-unit month. She said the DEG projects that Blu-ray sales will account for as much as 20% of total sales of certain upcoming high-profile titles, including Warner Home Video's "The Dark Knight," the year's No. 1 movie.

Blu-ray has been in the market since June 2006, but adoption was stymied by a brutal format war with another high-definition disc format, HD DVD. Both formats offered picture quality about six times better than standard DVD. The format war ended in February when HD DVD backer Toshiba pulled out of the race, and Blu-ray now enjoys the exclusive support of all six major studios as well as minimajor Lionsgate and a growing number of independent suppliers.
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Old 11-23-2008, 06:39 PM
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Quote:
Originally Posted by Citizen Erased View Post
Optical is done, face it and move on.
Digital download was done many times over. Faced it and moved on.

It's just another conduit, nothing more, nothing less.

Blu-ray is here to say. Face it.

Don't envy us when we have both best quality and convenience on the PS3, or the LG and Samsung Blu-ray players.
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Old 11-23-2008, 06:42 PM
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So, you have the option of downloading/renting apprx 6 to 8 hi def/blu quality movies a month before your ISP kicks in extra charges or throttles you out for the month for exceeding your bandwidth usage?
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