Futuresource Consulting, a UK based research firm, has released a report regarding the abandonment of physical media. The study takes a long-term perspective, and predicts that physical media sales will reach their peak in 2012, and then begin to slide as consumers move towards digital downloads or mobile entertainment. By 2012, digital sales will account for about 15% of the market. From there, it will increase at the expense of Blu-Rays and DVDs.
Futuresource claims that appearances are deceptive when it comes to physical, pre-packaged media like Blu-Rays and DVDs. Blu-Ray players and discs have been enjoying growing sales in the past few years, but these sales are occurring at the expense of DVD sales. In other words, the overall market for physical media is not growing, it's simply shifting.
Futuresource points to several reasons for the decline in physical media. One is the cost of the software – Blu-Ray discs are still cost-prohibitive, and are marked up anywhere between 200 to 400 percent over similar DVDs. But the most telling factor holding Blu-Rays back from making a breakthrough in the market is the fact that Blu-Rays are not a significant upgrade in the consumer’s eyes, compared to the previous media upgrade from VHS to DVD.
