In 10 years, maybe even sooner, we'll be gazing nostalgically back at Blu-ray and DVD – in fact, all optical media – as wistfully as we look back now at video tape and laserdiscs.
And the sooner the video content providers and hardware makers understand this ultimate reality, the better they can adjust their business models to compensate.
In just 10 years you say? Change can't happen that quickly, can it? Why, last year, Blu-ray disc sales reached nearly 100 million units, growing from a little more than a million just four years ago. Blu-ray hardware sales grew 146% in 2009 and will grow another 128% in 2010. DTC estimates Blu-ray hardware sales will reach 125 million units by 2015.
Yes, Blu-ray is booming. Enjoy it while it lasts. No consumer media format – wax records, vinyl records, audio tape, video tape, laserdisc – lasts more than around 20 years. Just look at what has happened to the CD (1982-2008), the longest-lasting media format. Two years ago, iTunes became the largest "record" seller in the U.S. In the video world, VHS hit the market in 1977 and was already considered old fashioned by 2000; in 2001, CEA reported only 15 million VCRs were shipped to dealers in the U.S. vs. 13 million DVD decks. And while DVD, born in 1996, may not be dead yet, in the immortal words of Monty Python, it was coughing up blood last night.
Source: DTC
Blu-ray, maybe not so coincidentally born the year DVD hardware sales peaked in 2006, therefore, ought to last as a viable format until around 2020 – 10 years from now. But its decline will be hastened by a competitor no physical media has ever faced, what I call Krell media – non-physical media, such as the non-physical instrumentality achieved by the denizens of Altair from Forbidden Planet.
Just consider the way we watched video in 2000, a mere decade ago. Even with declining sales, the VCR was still king of home video recording and playback that's to its 90-plus percent home penetration, and Netflix was only a wobbly two-year-old. The Web itself was also only a few years old, and we download speeds were measured by kilobits, not megabits, per second. If you said "home network" to someone, they'd have thought you meant Wayne's World. Steve Jobs had just returned to a rotten Apple, conventional wisdom assuming he'd be presiding over his iconic company's disintegration.
Flash forward to last week, when Steve Jobs announced Apple TV, take two. Tech media had been covering Jobs' negotiations with TV studios as if it were a pennant race for weeks leading up to his unveiling of 99 cent TV show rentals. Apple TV's announcement triggered a wave of reaction from other Krell media vendors; Amazon, for instance, announced its own 99 cent scheme sans rental time limitation.
Apple TV is merely a tipping point in the cancer that will eventually emaciate physical media. Blockbuster's troubles, the last physical media giant, for instance, evidenced by massive store closings and its push into the Krell media business, have been well-documented. But HD video on demand and DVRs has been lessening consumer dependence and appetite for suddenly clunky jewel cases and discs for years. "Media streamers" such as Roku, Boxee, etc., have provided a wealth of Krell media options to early adopters, and Apple TV has re-focused the klieg lights on their Krell media potential.
And Blu-ray hardware makers have been sowing the seeds of their own demise for the last 18 months with their connected HDTVs and players giving consumers access to Netflix, Amazon and other Web-based Krell media. With increasing municipal Wi-Fi ubiquity, iPhone, iPad and Android superphones and tablets all can connect to iTunes and Netflix apps for streaming on-the-go, killing the dependence not only on physical media but the living room.
Yes, the fat lady is clearing her throat to sing a requiem for optical media.
