22 June 2009

Is Blu-Ray the end of the road for optical media?

As most of us have been experiencing for the last couple of decades storage media is getting cheaper and cheaper as the days go on and the capacity of the storage media too has been
increasing at a rapid pace and by exponential factors.

Many of you reading this blog would remember (with frustration, jest and wonder) the good old floppy disks of the 90s. Many of us (especially in developing countries) still use the CD on a
large scale even though it is now almost a dinosaur in the developed markets of the west and Japan. Then came the DVD with its almost 5-10 times leap in storage capacity. And now, the new kid on the block seems to be Blu-Ray, a format that won the bitter format war against the HD-DVD. Blu-Ray boasts of a 5-10 times rise in storage capacity against the DVD thus boasting a 25 GB capacity on a single layer disc and a whooping 50 GB on a dual layer disc. By any standards, that seems impressive. And now even before the Blu-Ray becomes mainstream in any major market (it does have a small share in western markets where DVDs still continue to reign supreme) many people have even started to think “What next?” 100 GB? 200 GB?

The answer in my opinion to the “What next?” question is a little different. But first, lets make one thing very clear. What are CDs, DVDs, Blu-Rays (and even HD-DVDs for that matter)? They are in essence a content delivery mechanism. The content in this case largely being data with large sizes like movies and other multimedia content.

This large sized content was shipped in such optical discs for the last decade and a half for a three primary reasons.

1) These optical media allowed data/content with large sizes to fit on relatively small form factors (the discs) and be transported easily without many chances of damage.

2) The data/content was so large that it could not be transported over the then existing network infrastructure in reasonable time frames and without incurring large costs in terms of
time, money and productivity.

3) The existence of large, cohesive and powerful networking tools as well as highly evolved cloud services was not ubiquitous.

We can all agree today that points 2 and 3 are almost irrelevant for the most of us (even in relatively bandwidth poor countries like India). Today, data with large sizes can be downloaded
in a matter of hours. As most of you might know, the time required to download a 700 MB file (the size of a CD) takes less than 4 hours on a 512 kbps connection. This is a far cry from the
days of dial-up (the time when the CD was popular) when downloading a 700 MB file was only something you could dream about.

The relevance of point 3 has almost also vanished completely due to the prevalance and large scale popularity of cloud services like YouTube, Hulu and NetFlix which provide you with the
ability of streaming content directly from the Internet instead of actually purchasing hard media containing the actual content.

It is obvious that the content is more important than the medium through which the content is deliverd. And as the optical media whatever it may be DVD or Blu-Ray, is facing stiff competition as the entire model of content storage and delivery change. From the days when a burning an optical disc and distributing it stores from where they are sold to consumers was
popular we are now seeing a paradigm shift in content storage and delivery where content is stored in the cloud on some remote server (ala YouTube and Hulu) and then are streamed directly to the consumer on his computer using a high speed broadband connection.

As the Internet Service Providers keep upgrading their backbones and provide connections to businesses and consumers with higher and higher bandwidths the importance of optical media will keep on diminishing.

The prediction of most analysts and computer industry veterans that sooner rather than later our TVs will be connected to the cloud in one way or the other could be a death knell for the
optical media industry. We are seeing examples of this starting to happen. Apple recently announced that its Apple TV (which is basically a DVR) will not only allow streaming of content
from your PC’s iTunes library but also enable you to stream content from YouTube directly on to your TV screen.

This does not look good for the optical media industry in general. According to a Harris Interactive Poll found that 93 percent of those surveyed have no interest in purchasing a Blu-Ray

DVD player, despite HDTV ownership rising to 47 percent, up from 35 percent a year ago. The only way most of us will even own a Blu-Ray player will be if we buy a new PC or laptop with the Blu-Ray player included or if we buy some console like the PlayStation 3.

And even then whether the sales of Blu-Ray discs will pick up radically as they did in the cases of the transition from the CD to the DVD is a big question due to the rising competition of
HD cable and cloud services.

What will happen? Lets wait and watch...

Mitul Choksi
23rd June 2009 00:02 AM Indian Standard Time

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