World Without Optical Discs Leaves Consumer With Fewer Playback Choices, Analyst Says
Moves in the last month by Netflix and Apple may point to a world without optical discs, sooner than consumers with disc-based libraries and other AV companies in the home entertainment chain might be comfortable with, BTIG analyst Richard Greenfield suggested in a blog post Monday. He thinks Netflix may be trying to kill off the DVD when it changed its plans to include both streaming and DVD options for $15.98 per month, and the arrival of Apple’s new optical-free Mac Mini is a second serious punch, he said.
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"While on the surface it appears that Netflix is trying to bolster its DVD business by lowering the monthly subscription price ($9.99/month went to $7.99),” Greenberg said, “we saw Netflix’s package changes as a way to hasten the death of the DVD.” According to Greenberg, Netflix’s overhaul says to the consumer, “do you really need those DVDs, or is the streaming product good enough?” He bolstered his claim with the assertion that Netflix was making it virtually impossible for new subscribers to sign up for DVD-only service without knowing “the special URL DVD.Netflix.com,” which is not marketed on the Web and does not come up in a Google search, he said.
Apple is doing its part to marginalize the optical disc through its omission of a playback drive in its latest products, most recently the Mac Mini, which Greenfield called, until the most recent version, Apple’s “home media center device with HD outputs, no monitor and a DVD drive.” The latest version of Mac Mini joined Apple TV, the iPad and the MacAir as optical disc-free devices, he noted. Addressing what he calls “home entertainment’s uphill battle,” Greenfield said “consumers want to rent not buy in a digital world,” citing the myriad sources available for accessing movie content through subscription and video-on-demand services. “Why would you ever need to actually own a movie?” he asked. Library-building is unnecessary when you can get to anything, whenever you want, from whatever device you happen to be sitting in front of,” he said.
But not everyone agrees with Apple’s new vision of the world. In a review of the latest Mac Mini posted Monday, technology blog Engadget said the elimination of the optical drive “is downright baffling.” Acknowledging that many people will write off Apple’s decision as “just killing off something that’s on the way out,” Engadget said it was “a terrible, terrible decision.” Apple may want consumers to believe “that nothing worthwhile will ever ship on a physical disc again,” the review said, but streaming video through Netflix, iTunes and others is “just half of the story,” it said. “There aren’t too many HTPC owners that never pay their local Redbox a visit."
The role of the optical disc drive -- whether it’s a DVD or Blu-ray drive -- is about more than movie rentals, Engadget said, citing software applications shipped on physical discs, CD libraries and consumers’ desire to burn content to discs, including homemade movies. “Apple has decided that you won’t need to do any of that with this year’s mini,” according to Engadget, “and the only consolation prize is a $100 discount at the register.” The lack of a Blu-ray drive in a product clearly designed for the home theater PC crowd is “not only senseless,” but “laughable,” it said. An email to the Digital Entertainment Group for a statement of the long-term viability of DVD and Blu-ray wasn’t answered by our deadline.