‘World without discs’ very far off

As Samuel Clemens famously said of his own demise, the rumors of the death of packaged media are greatly exaggerated.

The popularity of downloading among the iPod generation is undeniable. The fact that consumers have become comfortable with solid-state media through the digital photography revolution cannot be argued. The seductiveness of rapid access hard drive DVRs, PVRs and camcorders add to the impression that we are in the midst of a transformation from portable packaged media to new permanent storage technologies, spelling doom for removable media—the same media that prompted so much excitement just a few years ago.

The variety of the onslaught supposedly ambushing physical media adds to the hand wringing. IPods and other mp3 players, TiVo, solid-state storage devices, VOD, PVRs, DVRs, HD downloads and online libraries promise a brave new world of storing content that doomsayers point to when predicting the end of packaged media, or, what some call, “a world without discs.”

Hogwash.

In our industry, it has always been fashionable to jump on popular new technologies, while predicting the demise of perfectly useful, practical and popular established technologies. But television didn’t kill the motion picture. And video didn’t kill the radio star.

The key to the home recording market is the growth of content. According to our research partner, Understanding and Solutions, home entertainment content will grow by an annual compounded rate of 8% over the next five years. This translates to worldwide sales of $467 billion by 2010, from $318 billion in 2005.

Thirty million U.S. households downloaded at least one digital video file in 2006. These included movies, songs, music videos and television programs, most of which found their way onto CDs and DVDs.

The sources of entertainment content are ever expanding. Broadcast, cable, video-on-demand, Internet, online and mobile sources all provide a vast array of programming to pique consumers with a wide variety of interests. I have a friend who loves horse racing. He records or downloads every program or clip he can find.

Further, research from polling and focus groups convince us that consumers want to have personal libraries of cherished content in a format that provides them the quality, permanence and flexibility they want and expect.

Again, to my friend—he’s terrified that he might lose some of his precious racing content. What’s more, around Kentucky Derby time, he shares the races he’s saved with his friends so they can talk about who they like in the Derby. Obsessive, sure. But his story illustrates the fact that everyone has an enthusiasm: family, baseball, sailing, scrapbooking and so many others that are precious to them and that they want to share with others.

Packaged media makes that possible.

By comparison, hard drives will fill up with content faster in coming years with high-definition content. Hard drives have a short lifespan compared to packaged media. And hard drives are incompatible with the existing installed base of playback devices.

What’s more, consumers have a long history of recording to packaged media, starting with music to cassettes.

Conclusion? Content is king. People want to save and share precious content. Packaged media is here to stay.