Studios fear little for DVD’s future
Threat of downloads said to be small because of bandwidth issues
By Danny King -- Video Business, 3/12/2008
MARCH 12 | LA QUINTA, Calif.—Reports of DVD’s decline in the face of more content-download services are highly exaggerated.
That was one of the few things studio executives agreed on during a panel discussion at the Content Delivery and Storage Assn. conference here March 7-9. Although there was little consensus about recent developments such as DVDs with embedded digital copies and 3D movies, the four executives surveyed said downloads and video-streaming were a long way off from supplanting DVD as the primary method of movie rentals or purchases from home because of technical limitations that can cause movie downloads to take hours.
“I don’t think we have to be worried about the replacement of physical media for some time,” said Benn Carr, Walt Disney Studios’ VP of new technology. “Downloading sales are not going to ‘hockey-stick’ soon. Every time I access a site and download, it’s not necessarily seamless.”
“Demand for downloading is very small and the satisfaction is smaller,” added Sven Davison, VP of content development and production at 20th Century Fox Home Entertainment. “The pipelines aren’t big enough.”
After Sony’s Blu-ray Disc emerged as the single next-generation DVD format after Toshiba said last month it would discontinue its competing HD DVD format, studio heads such as Fox’s Peter Chernin have said U.S. DVD spending, which slid 3% to $23.4 billion last year, would surge on Blu-ray sales. With Wal-Mart saying it will clean up stores by having fewer DVD discount bins, however, DVD spending may fall an additional 5% this year on a slowdown in back-catalog sales, Pali Capital analyst Richard Greenfield said in a note to clients this week.
Meanwhile, established companies such as Amazon.com and Apple have touted their Unbox and Apple TV products as download alternatives to the DVD, as have newer companies such as Vudu and Hulu. Amazon.com tried to streamline its service by teaming with TiVo last year to provide a more direct way to download content to customers’ TVs, but Apple may pose a bigger threat to both DVD sales and video-on-demand services, said Tom Adams, president of Adams Media Research, at the conference.
“Apple TV is a plenty elegant solution,” said Adams, who estimated the time to download a movie at less than a minute. “They’ve really solved the bandwidth issues; it’s easy to use and incredibly intuitive.”
Studio executives were less certain of how customers would respond to having DVDs with embedded digital files that can be copied to portable devices, something Fox, Sony Pictures Home Entertainment, Warner Home Video and Universal Studios Home Entertainment all started experimenting with this year. Lionsgate this week also said it would start including iTunes files on some of its DVDs this year.
Bill Mandel, Universal’s VP of broadband technology, said he’s “hearing from retailers that it’s something consumers want,” while Don Eklund, Sony’s executive VP of advanced technologies, said “the jury’s still out on whether carrying around feature-length films on portable devices is a novelty or not.”
There also was little consensus on the potential impact of 3D movies, though Disney’s Carr mentioned animated films such as Chicken Little and Meet the Robinsons as titles that will be reproduced in 3D for future DVD release.
