{"id":13010,"date":"2011-09-22T19:53:34","date_gmt":"2011-09-22T18:53:34","guid":{"rendered":"http:\/\/www.filmdetail.com\/?p=13010"},"modified":"2011-10-08T10:17:53","modified_gmt":"2011-10-08T09:17:53","slug":"discs-streams-and-dilemmas-netflix-streaming-dvd-blu-ray","status":"publish","type":"post","link":"https:\/\/www.filmdetail.com\/2011\/09\/22\/discs-streams-and-dilemmas-netflix-streaming-dvd-blu-ray\/","title":{"rendered":"Discs, Streams and Dilemmas"},"content":{"rendered":"

\"\"<\/a><\/p>\n

The recent announcement and subsequent u-turn by Netflix reflects a wider crisis facing Hollywood.<\/p>\n

Before the 1950s Hollywood studios made their money renting their movies to cinemas and then splitting the profits.<\/p>\n

When televison became a popular medium in the 1950s, it was a time of panic but eventually became another revenue stream as studios could monetise their libraries by selling them to a new emerging medium.<\/p>\n

In the 1970s when Sony invented the Betamax format, which allowed viewers to record programming on videocassettes, it spurred a worried Hollywood into adopting a rival format (VHS), which ultimately created a new home entertainment revenue stream.<\/p>\n

The video rental boom of the 1980s also gradually turned into a retail one as consumers bought videos of their favourite films.<\/p>\n

When the DVD format was introduced in the late 1990s, consumers upgraded to the format in the same way they had replaced their analogue vinyl records and tapes with digital CDs.<\/p>\n

Home video innovations that the studios thought would destroy them, actually turned out to be their salvation.<\/p>\n

From 1998 until 2004 there was a DVD boom which saw profits pour into studio coffers, as consumers embraced the format as DVDs were often availble to buy and rent on the same day.<\/p>\n

But dark clouds began to form in 2005 as the industry debated about what would be the high definition successor to DVD.<\/p>\n

After a costly format war between Sony’s Blu-ray and Toshiba’s HD-DVD, the former won in February 2008<\/a> partly due to the fact that they owned a movie studio and could put Blu-ray drives in the PS3 console (10 million PS3s outnumbered the million HD-DVD players in the market).<\/p>\n

By early 2008 things looked to have stabilised for the manufacturers and studios as there was now one format which they could all get behind.<\/p>\n

However, there were still some major challenges:<\/p>\n

    \n
  1. Consumer upgrade costs<\/strong>: The jump from DVD to Blu-ray was much more costly that VHS to DVD as it involved the cost of getting a new TV and player and at this stage costs of equipment and discs were unattractively high (even though they would later come down).<\/li>\n
  2. The Recession<\/strong>: The financial crisis of 2008 had many wide-ranging consequences as the world went into a global recession. For the entertainment industry the subsequent drop in consumer spending meant that people weren’t willing to replace their DVDs with Blu-rays.<\/li>\n
  3. Netflix and Digital Downloads<\/strong>: Over the last decade US service Netflix saw explosive growth in subscriptions, which has eaten away at the traditional DVD model as the company movies towards streaming.<\/li>\n<\/ol>\n

    Studios and retailers dealt with the cost issue by dropping prices and with many major titles folding in the Blu-ray and digital copy with the DVD release (sometimes known as a Triple play).<\/p>\n