The Future of DVDs
Innoblog has an interesting comment on changes in the DVD market. The question they're asking is whether or not DVD vending machines can challenge the likes of Netflix for the DVD distribution market.
When it comes to distribution channels, cost is a big, big factor. Whoever can distribute at the lowest cost stands a very good chance of winning, as they can underprice their competitors while maintaining just as high if not higher profit margins. Based on this, and based on the fact that price wars are already emerging in the online DVD rental market, it seems that neither the distribution channel has much of a chance of winning. The future belongs to an entirely digital process; think mp3s, but for movies. Some companies are already starting to do this, and they are in a prime position to be a big player once technology advances to the point where TV and the web are more merged.
When it comes to distribution channels, cost is a big, big factor. Whoever can distribute at the lowest cost stands a very good chance of winning, as they can underprice their competitors while maintaining just as high if not higher profit margins. Based on this, and based on the fact that price wars are already emerging in the online DVD rental market, it seems that neither the distribution channel has much of a chance of winning. The future belongs to an entirely digital process; think mp3s, but for movies. Some companies are already starting to do this, and they are in a prime position to be a big player once technology advances to the point where TV and the web are more merged.
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