Tue. Jul 16th, 2024

No nostalgia can save physical media

By nr39r Jul2,2024
News

The decline is unstoppable: while subscriptions to streaming services are on the rise, DVD and Blu-ray sales are definitely experiencing a decline.

‘The Mainichi,’ a prominent daily in Japan, has stated that Sony is planning to eliminate 250 positions within its physical audiovisual sector. This is a blow to the portion of Sony’s business that is distributed on discs, more especially the Blu-Ray format, which Sony invented and has been devoted to ever since it began displaying the first prototypes of discs in the year 2000.

Mass layoffs are being implemented. The news of layoffs in the technology industry in general and in the video game sector in particular is widespread, and these 250 jobs that are being eliminated are just a few examples of the numerous layoffs that have been reported. Since Microsoft made the announcement in 2023 that it was going to lay off 10,000 people throughout the globe, there have been 1,900 further layoffs at the same Xbox at the beginning of 2024. Sony itself followed suit with 900 employees, and then came Embracer, EA, or Take-Two, who laid off 6% of its workforce.

How much and where is it? The Mainichi reports that these 250 individuals constitute 37 percent of the workers at the physical media factory owned and operated by Sony in the northeastern region of Japan. It is said in the publication that “the planned job cuts come amid a decline in demand for traditional storage formats such as Blu-ray discs as streaming services are now the norm.” This indicates that the company’s film and television series department would be more likely to be impacted than its video games branch. There are also unnamed sources that are cited in the Mainichi, which state that Sony “will gradually cease production of optical disk storage systems, including Blu-ray discs.”

The nuances involved. This decision by Sony mainly impacts Japanese factories, therefore it is rather difficult to extrapolate on an international scale, according to the account that specializes in physical formats, President of Physical Media. This is an additional detail that is added to the conversation. Furthermore, according to the description, these manufacturers are specialized in recordable material (CD-R, DVD-R, and BD-R), which means that it should not have any impact on discs that are made for sale with commercial versions of films. On the other hand, this nuance does not negate the other: it is unmistakable that these layoffs are a manifestation of an undeniable decline in physical formats.

As the physical format continues to decline. Our data, which we have been managing for years, suggests that there has been a decline in sales of tangible formats, which appears to be leading to an inevitable conclusion. Over the course of thirteen years, from 2006 to 2019, the number of DVDs sold in the United States has decreased by more than 86 percent. In 2005, the format reached its highest point of sales, and Blu-Ray discs were introduced in 2006. Studies point to other reasons, which are the economic recession that affected sales, the birth and explosion of digital formats, and the launch of the first streaming platforms, all of which undoubtedly have a lot to do with the continued decline of physical formats. Although one might think that the launch of the new format is related to the decline of DVDs, studies point to other reasons.

Hit, but not exactly dead. DVDs continue to account for fifty percent of all sales of tangible formats in the year 2024. The fact that Blu-Ray has not been able to create an alternative, and sales of all of these formats are plummeting together, is not just good news for DVDs, which are on course to surpass VHS as the longest-lasting physical format in history, but it is also bad news for everyone else. Alternatively, to put it another way, there were 294,044 films that were accessible on DVD in February of 2023, yet there were only 32,289 films available on Blu-Ray and 1,272 films available on 4K. The public has discovered a replacement in streaming, not in a new physical format, which is bad news for everyone. We emphasize that bad news is bad news for everyone.

The most important factor is streaming. The data are coming in (for instance, Samsung stopped manufacturing 4K UHD Blu-Ray players in 2019 =), but one of the most obvious and widely accepted reasons for this decline is streaming. A study conducted in 2023 revealed that 67 percent of households in the United States prefer to subscribe to streaming services rather than purchase physical media. According to the same estimate, the number of subscriptions to streaming services around the world will surpass one billion in that year, which is a considerable increase from the number of 500 million in 2018. There is a clear rivalry that has been identified as the most preferred choice for consumers to consume audiovisual content.

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