For Those Who Still Think Physical Media Has No Place in the 21st century… (1 Viewer)

[Josh Steinberg]

Huge revenue source. Tshirts are like the popcorn and soda of the concert going experience. They cost almost nothing to make, sell for a fortune, and are a must-buy ritual for a significant portion of the audience.

 

[jcroy]

Back in the day when I use to go to rock concerts or nighclub gigs and checked out the merchandise table, I usually purchased the cds which were frequently not widely released. Mainly because the cds usually cost a lot less than the price of t-shirts.

The t-shirt prices were usually very sky high, while the cds were only around $10 a pop. (I assume all that $10 went straight to the band).

 

[Ronald Epstein]

It’s not to save money on fees.

Its because physical media sales were just over $3 billion last year, while subscription streaming revenue was nearly $16 billion. $3 billion, down from $20 billion a few short years ago. It’s because that disparity shows no signs of slowing. It’s because it doesn’t make sense for every company to continuously spend money on an infrastructure meant to handle ten times more demand than there actually is.

Ten years ago, it was basically the other way around.

I don’t understand why this has been so hard to convey. When you have a business that used to gross $20 billion a year that now only grosses $3 billion a year, something has changed dramatically. And when you have a new business that is eclipsing the old one so clearly, it demonstrates where the market is.

The numbers aren’t this way because people don’t understand what discs offer or because they’ve been swindled into streaming. The numbers are this way because the average consumer is demonstrating a stronger preference for watching a program than they are for having a physical copy of it. And it’s not even close at this point.

If you like movies enough to post on an Internet forum, you’re not an average consumer. If you like movies enough to collect discs, you’re not an average consumer. That doesn’t mean that it’s an invalid preference or a bad hobby. But you’re not in the mainstream for how most people are choosing to spend their entertainment dollars.

I don’t mean to direct this at any one person in particular but over the past 24 hours, I’ve been flabbergasted at some of the commentary I’ve read here, on digital bits, on social media, where a small minority of disc supporters are loudly talking about streaming as if it’s a cult to rescue people from. This minority talks about streaming as if it simply doesn’t work and could never work and seem determined to ignore the reality that for most people, the transition from physical to digital has already begun (if it’s not already finished). It’s all a version of “Well I still buy discs, my shelves are full, so sales can’t possibly be down.” I’m stunned by how many people in this group want the perfect to be the enemy of the good. I’m stunned by how many people think it’s bad to have access to more content than ever before for less money than ever before. I just do not understand the hostility and the denial that these things actually do work as advertised more often than not. I’m not saying go streaming if you don’t want to. I am saying don’t tell me that streaming doesn’t work just because it’s not your preference.

Josh, I agree with you completely on this.

The industry has drastically changed. You can see it when you walk into a store and see the diminished aisles dedicated to discs compared to what was there 10 years ago.

We, the collector, are dinosaurs.

 

[Malcolm R]

I get the sense that some people actively want physical media to cease to exist at all independently of consumer demand.

Yeah, there's a lot of this on this forum. It seems like a personal affront to some that physical discs still exist when their own interest in discs has waned.

 

[Daniel D.Teoli Jr.]

Optical media is very useful for archiving. The 'M' disk is more archival than film. Nothing beats it for digital archiving. Only drawback is limited storage. I like MP3 files instead of CD's, but still have a large collection of CD's from back in the day. With movies I like discs. But I'm old old cruster, so maybe that splains it.

 

[BobO'Link]

Musical artists make very little, and always have, off sales of records/tapes/CDs. They have always made the majority of their income from touring (aka concert appearances).

https://www.businessinsider.com/how-do-musicians-make-money-2018-10

"Airplay" helps concert revenue (more popularity means you can charge more) but artists really don't make much from airplay.

The *real* money in music is owning the publishing and/or performance rights to a song (as Paul McCartney famously taught Michael Jackson who purchased The Beatles publishing rights out from under McCartney). If you're a popular artist and can keep complete control of your library of songs *and* tour you can make a ton of money.

 

[Robert Crawford]

Yeah, there's a lot of this on this forum. It seems like a personal affront to some that physical discs still exist when their own interest in discs has waned.

You really think that? I see more of that type of attitude towards streaming from people that want nothing, but physical discs.

 

[Daniel D.Teoli Jr.]

Josh, I agree with you completely on this.

The industry has drastically changed. You can see it when you walk into a store and see the diminished aisles dedicated to discs compared to what was there 10 years ago.

We, the collector, are dinosaurs.

Dinosaurs?

I archive / collect reel to reel tapes and small gauge movie film 8mm - 16mm. They are the real dinosaurs.

 

[Malcolm R]

You really think that? I see more of that type of attitude towards streaming from people that want nothing, but physical discs.

I'm sure there are extremes on both sides, as with any issue, anywhere.

 

[Daniel D.Teoli Jr.]

Directly onto the multi terabyte hard drive of their several thousand dollar players.

LTO tape is big with the movie industry. I wanted to buy one, but too much $$ for me. When lotto comes in I will go to LTO.

 

[Daniel D.Teoli Jr.]

I'm sure there are extremes on both sides, as with any issue, anywhere.

Sure in our current climate of the soft civil war America is in we got the 2 extremes, really just the 2 opposing views. No problem with viewpoints. But with 'cancel culture,' they only allow for one viewpoint.

 

[Robert Crawford]

I'm sure there are extremes on both sides, as with any issue, anywhere.

Malcolm,

For the life of me, I don't see what you have stated from any current HTF member. Granted, there were a couple of former HTF members that might have been that way, but currently, I'm not seeing what you stated in your previous post. However, I've seen recent posts from "physical disc only" members that have been very critical of streaming and continue to downplay the benefits of streaming.

 

[Josh Steinberg]

I hope my posts aren’t being misconstrued. I’ve never been anti-disc. When I write about why things are happening, I’m just trying to bring context to the discussion. My discussion points for why the business is moving in this direction should not be taken as an endorsement of any one path.

I’ve pointed out for a long time that streaming meets the needs of the average consumer, and that by virtue of us caring enough to post here that means we’re not average customers. I’ve also long stated that there’s an opportunity for physical to continue as a collector’s niche (just as laserdisc was a niche during the days of VHS), but that in order to keep it going, it means that with the number of units being made going down, we’re going to have to step up and vote with our dollars if we want it to continue as a viable niche.

I think doing so will allow physical media to survive a bit longer, but will also cost more than perhaps the average enthusiast wants to pay. In this business right now, a sale is not a good sign. When companies like Twilight Time or Kino have a sale, it’s not out of the goodness of their hearts. It’s because they’ve invested in a title, it didn’t meet sales goals, and now there’s more inventory than they need costing money to store until it sells. The TT business model was viable based on selling all 3000 copies at full price; if it’s on sale, it’s not good. When Kino does a going out of print sale, it’s more often that the title isn’t selling, not that the license has expired. When Amazon sells new discs for $5, it often means that their stock of the title isn’t moving and that the studio has agreed to take a loss and let them liquidate their stock rather than initiate a wholesale return for units that have little or no value. When we see a new release we want and then say, “I’ll wait for the sale,” the message being received is “the demand isn’t there for this title.” When we see product specs and say, “this doesn’t include everything I want, I won’t buy until they redo it,” the studio doesn’t think that there’s something wrong with the product, they think that there’s no market for it.

If we want this thing to continue on, we’re going to be asked to pay full price more often and those prices might have to go up. We’ve been very lucky for a long time because the general public has subsidized our hobby by buying the quantities needed to keep the prices down. That subsidy is vanishing.

Try to look at the situation from the perspective of the studios and boutique labels. For years, they’ve announced titles and had both prior experience and sales surveys saying that people are interested in certain titles. They monitor social media and sites like this and see people say that those titles are day one purchases. And then they go out and do the disc and the numbers just aren’t there, they just don’t match what people say they’re going to buy. I’ve seen that side of it and it’s not a fun place to be. It’s like hosting a party that people RSVP to and then don’t show up for. Eventually you’ll go bankrupt pouring your money into catering that no one shows up to eat.

But I see encouraging signs because releases can happen when people put their money where their mouths are. I’m heartened by Bob Furmanek’s recent fundraiser to save African Screams. That movie has fallen into the public domain meaning that it’s harder to protect a restoration from theft but this could work for titles under copyright. Bob explained what it would take to restore the film, how much it would cost, and used Kickstarter to presell copies at $35 - basically an undiscounted retail price. If enough people preordered and paid up front, he’d be able to afford to do the work; if they didn’t, he wouldn’t be able to. And with that transparency of “this is what it will take” along with a deadline of “we need to do this now before the film itself decomposes,” people showed interest and paid up front. I think he raised four times the minimum amount he needed, and with every extra dollar was able to commit to creating bonus features. It’s going to be a phenomenal release. And in the end, it didn’t require anything unreasonable from anyone. It just required people who said they wanted it to commit to it up front. And, being informed of those conditions, the audience showed up.

So I’m not against disc and I’m not wishing for any one particular outcome. But it just naturally stands to reason that if far fewer people are gonna care about discs, the few that do remain are going to have to care more and show that support with their wallets for the format to remain viable.

 

[Jesse Skeen]

As long as they don't reach the ridiculous levels of laserdisc prices, that's fine with me. $5 discs have been around a while though, I never thought Blu-Rays would drop that low but they have for non-clearance titles. Laserdisc prices never dropped until the end of the format, but a few years into DVD the studios started dropping prices on those after they'd been out a while- and I thought the original prices from most labels were already reasonable as they were. If they didn't want people to "wait for the price drop" then they shouldn't have done those in the first place.

 

[Carl David]

I think it will be very interesting to see how this physical media v digital media dynamic develops.

In my opinion what will happen is if the streaming avenue becomes very lucrative (Netflix still deep in the red) is the studios will just refuse to licence their films to streaming services and just do it themselves once it becomes cost effective (Like Disney now). The longer they wait the cheaper it will become to implement this. At the moment all the streaming businesses including the new companies are growing this new market at their own expense with Netflix seemingly investing the most cash in this service so far to the best of my knowledge.

Does anyone think the studios are stupid?

We can argue that they are philistines but poor businessman they are certainly not.

Therefore, what I think will eventually happen is perhaps all the major studios streaming their own content with a few independent streaming service companies competing in the market which will probably result in:

1. Significantly increased prices for downloads and streaming content due to monopoly/lack of competition
   
2. Exclusive content with each company (no option of everything from one provider)
3. Limited time content such as 30 days to purchase before film expires/no longer available and other such scams etc.

I personally think Netflix will survive despite their current astronomical debts as they are starting to make/produce their own movies which will obviously give them the power to stream their own movies without licensing to anyone else exclusively. As long as they are run by top mangement and avoid some huge mistakes they have a good chance of surviving and flourishing.

It may turn out that one of the major studios buys out Netflix or they buy out some of/if not all of the smaller streaming services out there.

This brings us to physical media.

In my opinion it will be cheaper or similar cost to buy physical content as opposed to digital in the future which I think will help physical media to continue to have a market for a while yet. It will get cheaper to press discs and manufacture them over time as with any other technology. UHD will come down in price over time once the technology is more widely adopted etc.

However, I do feel that we have been or are currently in the golden age of physical home media particularly Blu Ray/DVD with a lot of competing businesses trying to get their decent share of the market offering a plethora of content including a lot of obscure films. I'm not sure if 4k UHD will hit the same heights as its predecessors.

I personally feel in a few years that many blu ray/physical media firms will simply go out of business as the market will probably continue to decline year on year as it has been doing for many years now. I fully expect to see at least 50% of the current companies offering physical blu ray films to close leaving only the major players such as Criterion who have been going a longtime and have a huge fan base developed all these years to compete with the major studios. It might be possible that the studios will not even bother with physical media eventually and just Criterion and a few others having a large slice of a small market.

This is my view trying to look at it from a neutral perspective. I personally collect physical media (Blu Ray) obsessively and would obviously like the market including UHD to flourish but obviously the world does not have the same interests as I have and so you need to be objective with looking at the market.

There are advantages and disadvantages to both physical and digital media so unless some streaming company can offer a vast library of all the major films made since the beginning of cinema and at a reasonable price/subscription monthly fee then I think both will survive and keep each other in check.

We will see.

 

[Mike Frezon]

Welcome to the HTF, Carl!

 

[Carl David]

 

[MatthewA]

UHD has nowhere to go but up simply because it's new. If it does go up, its sales will hurt DVD more than Blu-ray. After that, there'll have to actually be 8k content before you can even think about a format on which to put it.

 

[Robert Crawford]

UHD has nowhere to go but up simply because it's new. If it does go up, its sales will hurt DVD more than Blu-ray. After that, there'll have to actually be 8k content before you can even think about a format on which to put it.

What is your logic for that conclusion? Those that are going to buy UHD have already forsaken DVD, unless a film title is only available in the DVD format.

 

[Josh Steinberg]

I actually think DVD is more likely to be the last physical format that survives. The numbers aren’t trending in a great direction for any disc format long term. DVD still has the largest consumer install base. For circumstances where streaming isn’t used, it’s more likely to be because someone never moved past DVD.

There is a small but relatively robust specialty market for DVD coming from places where picture quality isn’t a consideration and where streaming is not yet practical. For example, schools. It’s still easier in a lot of schools to wheel in a cart with a TV and DVD player to show something than it is to install WiFi and streaming boxes. People who check out physical media at public libraries statistically are much more likely to be watching on DVD.

DVD has value as a lowest common denominator and that’s what will likely keep it afloat as the last physical format. By the time we get there, they won’t be moving many units, but I think that’ll be the last one to go.