With a lot of news coming out and proclaiming the rise of digital content and distribution, it seems like all the physical methods of media distribution are on the wane and before long will be out for good. In the scramble to cover the latest developments in digital distribution, many facts and figures are being ignored. The fact still remains that, for most people, DVDs and Blu-ray discs define a major part of their viewing experience. Despite the rise of Netflix and its ilk, physical movie rentals far outstrip the number of digital rentals.
If you take into account all the movie rentals for the first half of 2012 and analyzed them, you would find out that 62 percent of those rentals involved either DVD or Blu-ray, a substantial difference from the 38 percent that digital distribution garnered. The resulting movie rental figures are representative of the fact that consumers are not so quick to dump physical media as soon as digital versions pop up.
In reality, physical media has another advantage over digital: consumers can view recently released movies as soon as they come out. RedBox, one of the leading video rental services in the country, specializes in making sure that new titles are made available to customers as soon as possible. Since customers are also waiting for the newest releases, it only makes sense to go to those who can provide it the fastest. Pair that with the fact that most American homes are equipped with DVD or Blu-ray disc players, and the popularity of physical media becomes even more apparent.
Another reason why Blu-ray prevails over digital distribution is licensing. Struggling to fight the persistent decline of DVD sales, Hollywood consistently hesitates to license digital content sites like Netflix and iTunes, knowing that profits from digital sales are significantly lower than that possible with Blu-ray. This reluctance ensures that rental services like RedBox, Hollywood Video, and others will maintain the circulation of physical media for quite some time.
The generational gap is also responsible for the perceived loyalty of consumers to Blu-ray and DVD. Consumers in their early 30’s and younger are the only ones that can be expected to purchase movies exclusively in a digital format. The rest prefer Blu-rays and DVDs because it’s what they’re used to, widely available, and cheap to boot.