DVDs still preferable over downloads
FUTURE OF PACKAGED MEDIA: Retailers look to grow Blu-ray sales
By Susanne Ault -- Video Business, 2/5/2009
FEB. 5 | LOS ANGELES—Although movie downloading often is portrayed as all the rage, consumers feel most comfortable with physical discs, according to retail participants at Wednesday’s Future of Packaged Media conference here.
The consumer press has zeroed in on falling DVD sales, as well as the troubles of Circuit City among others, to say that people are turning away from traditional bricks-and-mortar supplied entertainment. But people continue to attach specific advantages to packaged media, note retailers. Downloading is cumbersome compared to DVD purchasing, and there is an appreciation for discs’ simple storage capabilities.
“Packaged goods solve a lot of problems for people, and it’s a well-liked medium,” said Mitch Lowe, chief operating officer at kiosk operator Redbox. “There is the thought that we should have more technology, but that isn’t the reality for consumers. … If you get an item digitally, where do you store it? How many times have you lost something on your computer? You don’t really own anything in your mind.”
Mark Fisher, executive VP at the Entertainment Merchants Assn., added that there are too many steps to enjoy a seamless downloading experience.
“There are roadblocks to consumers who are used to just popping in a DVD and having it work,” he said. “As much easier as downloading is becoming, you first need to find [the file] to download, then you need to make sure you get the full file, and then you have to find out how to get that content to your TV. And all of that doesn’t work all the time.”
Many retailers hope that Blu-ray will soon offset softening standard-definition DVD sales, creating an overall healthy packaged business.
Secondary-market specialist Hastings Entertainment has found surprising strength with Blu-ray, which was thought to generally appeal to big city early adopters.
Studios believe Hastings has carved out a relatively high percentage of Blu-ray software users among its customer base compared to other retail accounts, Hastings president/CEO John Marmaduke said during his Wednesday keynote.
Hastings' Blu-ray consumers account for a little less than 10% of its base, Marmaduke told VB following his speech.
“We want to be a pioneer [in Blu-ray] for small town America,” Marmaduke said, noting Hastings' commitment to offering low-priced Blu-ray hardware to spur format adoption. Over the holidays, the chain offered $179 Blu-ray set-top players, which generally sell for $250. Hastings also is working to provide a large selection of Blu-ray titles to rent and buy.
Some tips were given to improve the packaged media world.
Jim Donio, president of the National Assn. of Recording Merchandisers, said retailers could enhance how consumers find products to buy. Currently, a big benefit to Amazon.com and other Web sites is the technology to automatically recommended like-minded product after every customer purchase.
“In our research, we find that people are inundated with choice,” said Donio. “Physical retail can be a filter. … There are 76 million baby boomers, and 70% of them said they like buying physical media. They have lots of disposable income. But they are hungry for an appropriate filter. They feel disenfranchised because they don’t know what’s out there.”
NARM hopes to promote the bricks-and-mortar world by formerly sponsoring Record Day 2009 on April 18. This event, now in its second year, will feature retailers banding together to market themselves as alive and well, even if other stores are consolidating.
“This will remind people that entertainment stores continue to significantly contribute to the economy,” said Donio. “People hear that large entities are going out of business, but that doesn’t equate to every store going out of business.”
