It seems to be the popular opinion that the Blu-ray disc format was a complete failure, and we’re on the verge of completely going digital for everything that we consume: music, movies, and video games often the primary candidates being associated with this philosophy. Of course, it is very hard to argue against that. The past decade we have seen digital distribution systems which deliver video games directly to your personal computer. Your game library is now completely “in the cloud” and immune from hard disk failure. We saw iTunes rise to the top of ladder when it comes to purchasing music digitally, and whole host of others for streaming live music to your devices over the Internet. How can anyone forget the gorilla in the room: Netflix video streaming services make up for approximately thirty-two percent of all U.S. Internet traffic during peak hours.
Given everything above it is very hard to argue against physical mediums going the way of Betamax. Lately the talk has mostly been about the Blu-ray disc format, mainly due to the competition when it was first introduced with HD-DVD, but now because the pressure has been turned on with streaming services like Hulu and Netflix. But if you look at the trends in consumer devices, especially television purchasing, you can see that many people that did not buy high definition sets last decade are going out to purchase them now, and they’re looking specifically at 3D high definition set ups. Right now the only consumer disc format to support 3D is Blu-ray, which requires the use of high resolution (bitrate) audio.
If consumers want that crisp, clear, high definition video with surround sound, they’re not going to be able to get it over your standard Internet connection in the United States. In order to stream Netflix at 720p with high definition audio you’ll need at least a 5 megabit/second Internet connection. My Comcast Internet connection is the lowest tier available, as far as I know, which I measured at roughly 25 megabit/second to east coast data centers. The average speed for broadband in the United States is well under that threshold, pegged at 4 megabit/second, which would allow you to stream the “medium quality” from Netflix. Remember we’re only talking about 720p here, delivering content at 1080p would require much more bandwidth than that, but the average speed here is already struggling to deliver what consumers expect.
If that wasn’t enough the cable broadband providers across the United States are beginning to look towards changing their pricing models to reflect how Internet video distribution is cutting into their cable television subscriptions. That means you’ll be paying more money for your pipe, and have a cap on it before you’ll end up being charged more (usually by the 10GB increment) to fully utilize Internet streaming.
This summer Netflix announced the plan to split their DVD video service into a separate entity, and due to rising costs of the content they are now providing Netflix was also forced to increase the subscription service rates by 60%. These changes resulted in a consumer backlash and Wall Street punished the stock with a drop of more than 70% since July. Reed Hastings, Netflix CEO, tried to provide an explanation and give a half-hearted apology, but ultimately it turned out to be more of an excuse.
Ideally it would be amazing to stream high definition audio and video over the Internet with full clarity. This obviously is the future, but we’re only at the beginning of exploring this technology. In the coming years we’re going to realize higher bandwidth through the local Internet providers which will give services such as Hulu and Netflix the capability of delivering video streams surpassing even the highest quality that televisions support now. But don’t get it in your head that you’ll be throwing away your video discs anytime in the near future, at least if you care anything about surround sound, high definition video, and finally being able to own Star Wars in a quality format.