Want to watch a movie? Start your smart TV or your media player / set-top box and choose the movies you want to watch online. A new episode of your favorite TV series is out? All you have to do is turn on your smartphone and absorb the video in parts. Something you watch for free and with ads, for something you pay a subscription every month, occasionally you buy additional content, and in your apartment or house there are no shelves with discs. Comfortable? Probably, yes. But is it realistic right today? Is it always possible? Is it suitable for everyone? Let’s try to find out.
Why the mass media market is going online
If we try to squeeze all the market analytics into a few sentences, the situation is best summarized in Sony’s latest annual report. According to it, digital music releases already account for almost 70% of sales. As for movies and music videos, since 2015 there has been a gradual decline in sales of content on physical media and video on subscription in 2018 has already taken 55%. The trend slowed slightly in 2018-2019 (there were movies on 4K UHD Bluray), but 4K discs will still be a niche product and will not affect the fate of the market as a whole. Year after year, digital copies will gradually replace physical copies.
Why is this happening? A closer look at the issue reveals that it is not only the “desires” of publishers and media corporations. Yes, it is advantageous for them to switch from physical copies to digital and reduce costs. There is no need to deal with test copies, think about the design of the disc/packaging, build a network of logistics for deliveries even to small countries of the world and, finally, solve the problem of unsold copies. And the speed of content delivery to the end consumer increases significantly. After all, digital content is available to everyone at once, right on the day it is released. And somewhere in the shadows looms a dainty idea with the elimination of the secondary market (resale and exchange of discs), which will increase sales.
But buyers also have their own reason and their own problems. Almost a third of consumers are not suitable not only for the disc option, but also for the download option. There is such a term as “the rental generation”, for which the rental scheme seems the most natural. Many believe that it is the content itself that matters, which means there is no need to pay for all the expenses in the chain “creation-print-distribution of discs. Plus, studies show that new-generation (1990+) customers are more likely than older customers to hold the “CDs are a relic of the past. They simply don’t have the physical space to store stacks of media. They don’t experience the emotional joy of buying and storing, don’t see the point in collecting, and so on.
Does music prefer streaming?
Up to 90% of music sales will eventually take place online – the process is irreversible and logical. Back in 2018, legal audio streaming was outpacing illegal downloads by more than 30%. Even high-quality music does not require very fast Internet, and in the situation with Hi-Res tracks, material can be rented or bought (to avoid breaks during streaming).
CDs have and will have good circulations, and the old digital formats for audiophiles are struggling with Hi-Res audio. Only Blu-ray Audio, which has become an outlet for music collectors in maximum quality, will be able to occupy its small niche. We already discussed this topic in detail two years ago (Hi-Res vs. Blu-ray Audio, SACD and DVD-Audio) and now our forecasts are only confirmed. And on the shelves of music lovers the ever-relevant analog alternative – vinyl disc (LP) – will keep BD-A company.
Video streaming services vs. DVD, Blu-ray and 4K Blu-ray
Pessimists regularly ask questions about bluray sales. To their surprise, statistics show that all is not so bad. The well-known analytical portal The Numbers regularly publishes rankings of the best-selling movies on Blu-ray in the U.S. For 2018, the first place was taken by “Star Wars: The Last Jedi,” which sold more than 3 million copies only in America, and worldwide approached the mark of 6 million. Only 20% less indicators for “Black Panther,” “Thor: Ragnarok” and other box office hits. In 2019, a dozen titles will break the sales mark of 3 million, and among them are both blockbusters like “Avengers: The Final Destiny” and pictures like “Bohemian Rhapsody. Quite good figures, which are impressive even against the background of the absolute sales leader in the world – “Avatar” sold a total of about 8 million copies.
But if we collect statistics on the viewing of box office blockbusters in online movie theaters like Netflix or downloads to iTunes, we will see the loss of Blu-ray by at least 3 times, and sometimes by 5-6 times. The situation is saved by hundreds of movies and TV series, which for various reasons have not made it to streaming services, but are successfully offered on physical discs. Nevertheless, the online trend back in 2018 caught on with many consumer electronics manufacturers and jumped ship. The first swallow was the brand Oppo, which stopped the production of Blu-ray players. Since February 2019, the phasing out of new devices has also affected Samsung. It is suspected that 2020 will be the last year with the release of new models, and then the remaining manufacturers in the market will only sell goods from stock. A nice counterbalance to this trend will be the availability of UHD Blu-ray drive in next-generation gaming consoles (PS5 and Xbox Series X).
Recently, in November, new streaming services launched Apple TV Plus and Disney Plus, and in the spring of 2020 will enter the market online movie theaters Peacock (from NBCUniversal) and HBO Max (Warner Media). First in the U.S. and Canada, but then in Europe and Latin America. Already at the start, they all offer a huge library of films and series from sister studios. But is everyone satisfied with the quality of content and range even in the top video services?
If we compare SD content in streaming and DVD, we can talk about achieving parity in 2019. The largest video services stream video at a bitrate of 6-10 Mbps and this is comparable to discs. And in the case of encoding in the new HEVC format even more so. If you look at HD content, streaming on average does not reach even half of the bitrate of video on Blu-ray. Similarly, the discs have a sound advantage (DTS, DTS-HD and TrueHD vs. DD5.1). The release of new releases in 4K HDR (sometimes with Dolby Vision and Atmos) marked a new round of confrontation, but judging by bitrate, even here streaming loses at least 2 times (on average 2.5). Plus recent studies show that 4K movies from online services do not meet HDR standards (maximum brightness below standard). Overall, the difference in quality of 4K content in favor of 4K UHD Blu-ray discs is visible to the eye on any 55-inch or larger TV. And if you want maximum quality and your equipment can handle it, there are no alternatives to Blu-ray (3D, 4K) yet.
What about the range? In the case of streaming, there are limitations, because now the work of all services is aimed at the realization of quickly consumable content. Series (series of 20-55 minutes), new releases 3-6 months old and popular films of the past years. Some are convenient to watch on a smartphone, and some are more suitable for viewing in a home cinema hall. Russian-language services have too much content in categories B and even C, that is, movies that you didn’t even know existed. But what if you are a fan of arthouse or indie films or are interested in classics from the 60s or 70s? That’s where you’re likely to run into a lack of material or poor video/audio quality. Simply put, streaming services cover the mass taste and focus on the most current content. On discs, on the other hand, you have a chance not only to find the film you value in maximum quality, but also to get rich bonus material. Collectors will appreciate the design of the edition and will be happy to spend a couple of minutes on the menu, and users of online movie theaters on the contrary want an instant start of viewing. For fans of cult movies an important plus is the availability of editions with all sorts of director and alternate versions, and this you can not find in the streaming.
As a result, the market is already creating a kind of balance where a collector or connoisseur of film classics and art house can buy a beautifully decorated disc and watch new releases online along with a huge army of fans of serials or blockbusters.
The future of content on CDs – a prediction
In the future, movies and music on physical media will be the lot of collectors and fans of maximum quality. Mass product will go 80% or more to distribution via streaming platforms. But all indications are that this will not happen anytime soon.
On average, there is little penetration of fast Internet around the world (and even in highly developed economies). The current cable and DSL lines do not provide the necessary speed for 4K movies, and the mass introduction of fiber optic networks or 5G is delayed and will clearly not take 2-3 years.
The new PS5 / Xbox Two game consoles will be equipped with UHD Blu-ray drives not for the sake of the disc format itself. Simply download games for 80 GB, watch 4K HDR movies online with a bitrate of 25-35 Mbits require a good Internet connection, as opposed to the mass version of Netflix with 10-15 Mbits. But in a couple of years the 8K format will become relevant, and perhaps new discs will be needed for new volumes of information?