The best advice and inspiration to launch and grow your video business.

Blu-Ray Funeral brings growth for streaming and video-on-demand

In the ultra-competitive home entertainment world, it appears that the adoption of Blu-Ray is not making the cut. While we observe the decline of one, there is a not-so-surprising uptick for the options of streaming and video-on-demand. What was once hoped as the darling of the industry, Blu-Ray has continued to lag in sales and popularity. The cultural tide is turning and there is a scramble to find methods to accommodate, adjust and bring revenue increases.

The launch of the Blu-Ray discs in the multimedia format was the ‘golden nugget’ appeal that brought the buy-in from the movie, gaming and music industries. The general public, however, did not want to be pushed into yet another change requirement for players and ownership. Paul Gray, director of DisplaySearch’s TV Electronics & Europe TV Research, stated “Many consumers see DVD as good enough. It is rather like a less extreme version of the CD story, where the format was so good there was little room for improvement (at least in terms of an economically viable category).” Combine this concept with the expectation and acceptance of streaming options and video-on-demand, and it has become clear that Blu-Ray, as it stands now, is not here to stay.

DVD statistics in 2009 demonstrated a total domination at 96% of spending for home entertainment. Digital Entertainment Group reported a decrease of 30% in overall optical disc sales, with only a mainstay of DVD sales attributed to rental kiosk-style machines.

The proof of a generational gap in supply-and-demand of physical devices has been demonstrated in a Generator Research report that predicts in the next four years, Blu-Ray and DVD sales will decrease by around 38%. Additional findings from the report indicate that revenues for online movies is expected to grow from $3.5 billion to $12.7 billion by 2018, reflecting a 260% jump. Since online distribution is a major portion of the current entertainment industry, this will affect current sales, but should level out in the long term.

Sony’s financial results announcement is anticipated to show a net loss. Considered to be one of the parents of Blu-Ray with the popularity of the PlayStation 3, they have closed down their subsidiary for optical drives to realign their focus to netbooks, smartphones and tablets.

Stats from IHS Technology, a market research firm, show that sales and rentals in the home entertainment realm went from a year after year 3.1% increase with the last measurement in 2012, to 0.7% increase in 2013.

Paul O’Donovan, Gartner analyst reaffirmed that even though on demand is dominating the entertainment market at the moment, there will always be a need for those that want physical copies to share their experience. The current popularity of ‘cloud storage’ has catapulted the virtual storage concept to the next level. O’Donovan feels that there may be a return for storage and backup to optical media. O’Donovan stated “Just wait for that cloud storage [to lose] all your photos, home videos, etc. Then the good, old back-up plan will seem a no brainer.”

There have been strides in storage capacity on the corporate side, as the BDXL (Blu-Ray Disc eXtra Large) came out with 100 GB and the write-once 128GB formats. The target audience for these have been the data needs in the archiving world for medical, document imaging and broadcasting industries. O’Donovan stated “I’m not sure how successful these new versions have been in the corporate world…[but it’s] got to be a good long-term solution that’s better than HDD’s, flash or tape storage.”

There seems to be some hope on the horizon for optical drives and Blu-Ray as the new plan for release of a “cold storage” low-power system containing 10,000 Blu-Ray discs. Revealed on Facebook, the archive system will energy use by about 80% and 50% in storage costs, when comparing it to the current cold-storage, hard-disk drive. In March, 2014, Sony and Panasonic have worked together to create a 1TB disc, which will offer format compatibility on an inter-generational level effectively making the current Blu-Ray obsolete. The first release of the 300 GB version is anticipated for the summer of 2015.

All things video business, straight to your inbox.