Why DVDs won't be going away anytime soon
Americans love to watch movies on DVD.
Just don't get too attached to those shiny silver discs.
Experts say that like vinyl records, 8-track cartridges and VHS tapes, DVDs will become obsolete as they are gradually replaced by electronic delivery at the push of a button.
But because it might take a couple of decades for everyone to get onboard, for the time being the DVD is still king.
"We just rented our billionth DVD," said Chris Goodrich, head of public relations for Redbox, which offers DVDs for $1 at distinctive kiosks found in shopping centers, grocery stores and fast-food outlets.
"Last year we were installing a new kiosk every hour," Goodrich said. "Today there are locations so busy we're adding a second kiosk. And we've just started carrying Blu-ray discs.
"So it may be sexy to talk about electronic delivery, but right now consumers still prefer the portable, physical disc that they can carry from room to room or household to household."
Redbox will offer films digitally "when the time and the solution is right," Goodrich said. "We've made no commitments to any partners or developed any final strategy. Our emphasis is on the physical disc."
Officials for Netflix, the service that for a monthly fee mails unlimited DVDs to its subscribers' homes, say they expect to be delivering discs for at least the next two decades.
"There's an enormous infrastructure of DVDs that will be viable for years," said Steve Swayze, the company's vice president for corporate communications.
When Netflix was founded in 1999, its business model predicted that half of its catalog would be available for streaming within five years. A decade later the company is nowhere near that goal.
But make no mistake — Netflix is looking forward to the day when it will deliver all its films via the Internet.
It's all about money. A DVD rental by mail costs 90 cents in postage (45 cents each way); the same movie costs only 5 cents to stream.
Netflix subscribers — they're expected to number 40 million by 2016 — already can stream more than 20,000 titles electronically.
The advantages are obvious. Instead of waiting several days for a disc to arrive by mail, streaming provides instantaneous gratification. Nor is there a need to pick up and return a DVD to a video store (or Redbox kiosk).
All you need is Wi-Fi on your home computer and a recently manufactured Blu-ray player or a video game console like Xbox, Wii or PlayStation with built-in Netflix software (or that of other streaming providers like Hulu). You watch the movie on your television. Or you could splurge on one of the new generation of flat-screen TVs that come from the factory ready to stream.
But the move to 100 percent electronic delivery of movies has a few obstacles to overcome.
• Technophobia. Millions of us never figured out how to program our VHS machines to tape a show while we were away from home. There's a similar reluctance to take advantage of the new streaming technology.
Netflix's Swayze notes that the shift over the last decade from VHS tapes to DVD represented a change to a lighter, easier-to-handle and better-looking format. But it didn't change essential behavior.
"You still went to the store, picked up a title, brought it home and put it in the machine.
"But streaming is an entirely different behavior. You just push 'play' and start watching instantly. You can fast forward, rewind, stop it and resume watching later at the same place.
"The cultural hurdle we're facing is getting customers to understand how easy it is."
Currently 60 million American homes have Netflix-ready devices. Many owners, though, don't realize they already have streaming capability.
It's largely a generational thing. Older consumers are more likely to have a Luddite outlook and be reluctant to dive into new technology. Young people, on the other hand, are so accustomed to downloading/streaming music, films and TV shows that it's not an issue.
• Selection. Blockbuster, Netflix, Redbox and your local mom-and-pop video store can purchase DVDs and then rent them to customers under the Supreme Court's 1979 "Betamax" case, an expansion of the court's long-standing "first sale" doctrine.
But the doctrine applies only to physical objects that exchange hands, not to electronic delivery. That means that before a film can be made available for downloading or streaming, a service like Netflix must obtain a license from the film's owner.
"Licensing a hot new release for streaming can get very expensive," said Netflix's Swayze. "And because of the need to license each title individually, our streaming catalog doesn't yet have the extensive breadth of our DVD catalog."
Though Netflix can stream 20,000 titles, it has more than 100,000 available in conventional DVD.
One way to speed things up is to negotiate for entire film libraries. Earlier this year Netflix signed a $1 billion deal with Paramount, Lionsgate and MGM for streaming rights to their films for five years.
But it's questionable whether any one streaming provider ever will be able to offer every title. Consumers who want total access may have to subscribe to several different providers.
And not every content creator may allow its titles to be streamed. So far HBO and Showtime have rebuffed efforts to make their catalogs available over the Internet.
• The "collector" mentality. For decades, "owning" a movie was beyond the reach of all but a few individuals who had home movie projectors. Most of us saw a film once in the theater; if we were lucky we might catch it again on broadcast television. The arrival of home video meant that everyday movie lovers finally could possess copies of their favorite titles.
• Extras. Love those DVD director's commentaries? Or those making-of documentaries?
One reason DVDs will be around for a while is that while they routinely offer these viewing extras; streaming services don't.
In order to make them available for streaming, a provider like Netflix has to negotiate a separate lease for each element: the movie, the commentary, the documentaries, deleted scenes, outtakes and other features.
It can become a financial and legal nightmare. That's why streaming customers can watch the feature film, but usually not the special bells and whistles. For that, you have to stick with the silver disc.