Don't Bury the DVD Yet

The Tech-Web story makes it sound like an online threat to traditional DVD models, and the study the story is based on ($2,999, be my guest and let me know what the detail numbers look like, or enjoy the abstract) makes it sound more like a win for big media companies. But underneath are some more numbers pointing to a trend that I think is a real opportunity: online burn-it-yourself DVD distribution.

Don't look for stunning insights from the report:

"The high-tech market research firm finds that, with on-line services charging $4 for a movie, an across-the-board decline in retail selling prices for DVDs is definitely possible."

Umm... definitely possible, eh? At only $4 for a DVD-quality movie (that I'll assume is a gigabyte in size for a no-frills environment)? I'm not sure the costs of delivery can aggregate down that far in the near-term, but it is "definitely possible." Even if you consider their projections of 280 million DVD burners and 247 million broadband connections by 2008 a bit aggressive, they are still looking at the same trend that I am.

People are downloading DVDs today and burning them. Unfortunately, much of those are pirated, as no one has found a business model to make that work yet. But the concept of paying for a DVD you can make yourself and pricing that at a point near what In-Stat is suggesting is a model that some savvy independents could deploy before the end of year. Technologies like BitTorrent might help create the cost of delivery margins you need to even see a positive revenue from that.

People threatened the most? Retailers. People threatened the least? Early adoptors among entrepeneurial independents (who could be pioneering this before the end of the year.)

posted to Stats & Data on April 01, 2004