Physical media is going the way of the dinosaur, as most folks now choose to download or stream media online. The industry has been giving the eulogy to CDs for a while now, but their cousins, the DVD and Blu-ray disc seemed like they were going to be able to cling to life just a tad longer.
But it would seem that the DVD and Blu-ray market is about to take its dying breath, with a projected negative CAGR of 3.64 percent from 2013-2018 being the final nail in the coffin.
In this week’s TechNavio Trends, we look at a few reasons for this decline.
Online Content
The increase in the availability of online video content is the biggest challenge for DVD and Blu-ray vendors. Companies such as Netflix, Amazon, Instant, and Hulu offer high quality, convenient content, which is perfect for an increasingly tech-savvy (and relatively lazy) population.
Production houses are also releasing movies on the internet well before they are ever burned to physical media. Plain and simple, DVD and Blu-ray vendors are just finding it difficult to counter this threat.
Shift in Consumer Preference
Pop quiz! If you could spend US$8.99 a month for an entire library of TV shows and movies, or spend upwards of US$20.00 on one DVD, which would you choose? Yes, this is the new media model, where consumers have significantly more choice over what they consume. It’s no wonder that spending on streaming has risen exponentially over the last couple of years.
Consumers are increasingly shifting from owning discs to buying into video on demand streaming services. Obviously, this shift in consumer preference to digital home entertainment is reflected in the declining Global DVD and Blu-ray market.
Increasing Online Sales
This gloomy outlook for DVDs and Blu-rays have lead retailers to offer more and more discounts to consumers, especially online. Discounted products and low-cost combination packs like BOGO deals are the new norm in the DVD market. To attempt to compete with online stores, retail stores are also offering discounts, thus increasing competition and ultimately benefitting the consumer but adversely affecting market growth.
Declining Prices
The price of DVDs and Blu-ray discs has been continuously declining over the last five years (but not enough to make people actually want to, you know, buy them). The market has matured—DVDs are no longer the new kids on the block, and as we all know, when it comes to tech, new is the only way to go.
The resulting fall in demand has been disastrous for the overall market, and has driven prices down even further. However, even a fall in the price of discs is unable to contribute positively to the DVD and Blu-ray market.
If you like a good train wreck, and want to watch the drama continue to unfold in this plummeting market, check out www.TechNavio.com!
