It’s a classic case of the disruptive entrants and a strategic inflexion point: New technology threatens the status quo, as streaming video propelled through the cloud by big data takes on the DVD and Blu-ray. Discs are a venerable golden goose egg for studios, which last year generated some $18 billion in sales and rentals.
The strategic technological shifts that are driving this business change are our old friends: cloud computing and big data.
Change is a Constant
With DVD sales declining and streaming services growing, it’s already clear who’s going to be the loser of this high-tech Gunfight at the O.K. Corral. But the sub-plots are tantalizing: Hollywood studios are hell-bent on retaining profits from movies after they leave the theater, while technology companies and online retailers jockey for supremacy in movie streaming.
To say that movie streaming has been a hit would be an understatement. According to Dan Cryan, senior director of digital media for market research firm IHS, “We’ve hit the point this year where by some measures, people are watching more movies online than physical discs.”
Like the music CD before it, the DVD is under siege—and for a similar reason. Just as iTunes lets you download individual songs rather than entire CDs, streaming services, cable and satellite companies now allow customers to rent movies as well as buy them.