Streaming Content is Flourishing But Physical Media Will Never Die
I'm so tired of hearing physical media is dead.
In college, my journalism professor told me an amusing tale of sitting in the same seat I was, listening to his professor recount a story of the professor before him detail the death of newspapers.
My point is this; physical media is in decline, but it will never truly go away. Sure, a golden era has passed, and the competition has never been more threatening. But, that same nonsensical tale about print can be said for DVD, Bluray, 4KBD and the formats to follow.
Data released this year by trade organization Digital Entertainment Group (DEG) states that revenue from sales and rentals of movies and TV shows fell 7% through 2016, leveling out around $12 billion. Meanwhile, subscription streaming grew by 23%, to about $6 billion.
Looking back further, the YoY numbers for physical media aren't great either. Like clockwork, they have been declining anywhere from 5% to 12% since 2010 according to DEG.
While it may seem like streaming is taking more of the pie from physical media, the industry as a whole is growing. Home entertainment reached $18 billion dollars in 2016, up 2% from the previous year.
The data doesn't lie; physical sales are hurting. However, the big payoff for physical media is two-parted - one part a superior library and the other part is properly utilizing home theater hardware.
The first part is pretty self-explanatory. Many streaming services don't offer a full selection of 4K content. In fact, Netflix and Amazon have only just begun releasing a selection of 4K content. In 2014, Netflix rolled out House of Cards in 4K. Not long after, Amazon Prime released their first HDR content. Today, Amazon Prime and Netflix both offer a small selection of 4K HDR content which is nothing to be ashamed of considering how fresh the format is.
On the other hand, 4K content requires a ton of streaming data. Netflix notes a steady 15 Mbps connection - ideally 25 Mbps - is needed to get the full resolution. Without a premium internet package, consumers risk constant buffering or a complete lack or stay stuck in 1080. Adding to that, consumers have to upgrade their internet (if it's available in that area) on top of paying for a premium subscription.
The inherently data-hungry media has spurred a backlash from many big internet providers in the form of monthly data caps and actively throttling their customer's bandwidth, not just for streaming data but all data used at home.
Maybe subscription fees and internet packages are not the most damning of details, considering physical discs go for about $12-$25 a pop, but there is a point of breaking even when comparing streaming services to physical media. The question is just how much a consumer is willing to pay for their convenience.
The second part is streaming service don't take advantage of all the brand new technology in today's market. High Dynamic Range is arguably more prominent than 4K at this point, and while more streaming providers are pushing 4K content, very few have HDR. Many regular consumers will have a hard time telling the difference between 4K and 1080, but the HDR content is indistinguishable from SDR. The same applies for audio when comparing a regular audio to a Dolby Atmos or DTS:X system.
Watching upscaled content without surround sound on a 4K, HDR, Dolby Atmos capable system can feel a lot like purchasing a Lamborghini just to sit in New York rush hour.
All in all, it's not quite apples to oranges, as streaming and physical content will appeal to different audiences. But, at the end of the day, that's the point. There is a reason print, vinyl, and brick and mortar still exist in an age of instant gratification. The seemingly endless list of content may appear to be the solution, but it hasn't quite been perfected.
Enthusiasts still demand physical media as it offers an unrivaled buffer-free viewing experience, takes full advantage of the invested technology they have in their homes, and has a release schedule far ahead of streaming services.
Looking back a decade ago, which is a very long time in technology years, people were saying Blu-ray would never even make it to retail. Between a format war (HD-DVD anyone?), a budding Netflix, and cable providers 'new' video on demand service critics were claiming any new physical media was virtually dead on arrival.
The truth is physical media is here to stay. There may be a point in the future where it is comparable to streamed content or vice versa, but high tides raise all ships. As long as companies continue to make physical media, there will be an audience to consume it.
My suggestion? Utilize both and stop rooting for one to fail.