Is Physical Media Doomed?
In April of 2015 FOX announced that they would no longer be releasing season sets of The Simpsons on DVD or Blu-ray. On the surface, this was FOX's way of saying that sales were down for home media, and Simpsons DVDs were no longer making enough money to justify their continued release. In reality, FOX was using The Simpsons as a test to see if the fan base that previously had purchased the DVDs would begin buying digital copies instead. If there was no significant spike in digital sales for Simpson seasons, then FOX could always go back to releasing the seasons on DVD.
Digital media is the latest version of a long time goal for studios. For the home video market to be rental only. Ever since the first movie theaters, motion pictures had always been a rental based business. Studios made their profits by leasing their movies to theaters, and later for television broadcasts. When VCRs were introduced, movie studios were dragged kicking and screaming into the home video market. If they themselves did not release their own movies on VHS, then some bootlegger would. Video rental shops emerged, but the studios did not share in those profits.
The studios invested in the development of be a video cassette that would erase the movie after five viewings. Unable to work the bugs out, the cassette was never put on the market. An erasable cassette would have meant coustomers would only have the movie for a short period of time, and need to purchase a new tape once the old one self erased. In the 90s the studios were at its again with a format called DivX. Movies would only cost $5, about a quarter that was being charged for the same movie on DVD. The catch, the DivX disk would not play without the access code, which meant the DviX player needed to be hooked up by modern to the internet so the studio could send the code. You got two to three free plays, after which from that point on the studio would charge you $5 for every additional viewing. A disc you owned, but needed to pay to watch. The service never caught on, thanks to stiff competition from DVD which allowed you to watch your movies as many times as you wanted.
With digital download, studios hope to replace physical media for good. Instead of owning a film, it would be rented. This time around the idea has caught on. An evolution from the video rental shops, via Blockbuster and Netflix, where rental today is over an internet connection instead of a treck to the local video store. Physical media owners see this as an acceptable alternative. They watched as their Betamax, VHS and/or laserdisc collections ended up cluttering their shelves, only for those formats to become obsolete, and once the players broke, the discs and cassettes become useless junk. And the occasional disc or cassette that oxidized or demagnetized on the shelf. Not mention the realization that most of the movies they bought over the years they only watched once.
But for many collectors of physical media, switching to rental is not an option. Rental has been an option since shops began renting video cassettes in the 80s. The reason why they all went through the extra expense of buying a movie was it was the only way to insure they could watch it whenever they wanted to. With rental shops, the tape could be out for rent by someone else, or had been lost or damage or sold by the shop. And how many rental shops we're opened 24 hours?
And before you can say "Digital and streaming is available 24 hours, and the movies are always available." let me remind you that the studio or anyone who owns any copyright for that movie can have it pulled. Much the same way Taylor Swift had her music removed from Spotify. It is quite possible the day you go to rent your favorite movie, it will no longer be available. Physical media insures that your favorite movie will be available for as long as your player continues to work, or until you are careless enough to damage the disc.
There is one thing that is undeniable. Sales for movies on DVD and Blu-ray are down, way down. Because of this, many stores have stopped selling movies altogether. But does this mean that Americans are turning to digital downloads? No really. A good chunk of sales have gone to eBay. Americans are still buying physical media, they are just buying it used. Studios only see money from media sold in stores, and not a cent from used media that is resold.
Also hitting sales are unscrupulous sellers who shrink wrap used discs and sell them as factory new. Not just on eBay, but Amazon has been accused of occasional delivering a used copy when a new copy was ordered. Even brick and mortar stores have been guilty of this. I have seen used box sets sold as new everywhere from Target to Barnes and Noble. Only a fraction of these are caught by consumers, as only some packaging is vulnerable to the wear and tear that gives away the box has been opened and handled. Much like the used DVDs sold on eBay, studios see no money from used discs sold as new. Who knows how many billions are lost to this fraud.