If its any consolation, the next time Forrester is right will be the first. ----- Original Message ----- From: "bryan" To: Sent: Thursday, September 04, 2003 12:16 AM Subject: Re: Universal Music cuts CD prices > > You probably read all about the "death of the CD and DVD" yesterday, > > right...Here's the press release: http://makeashorterlink.com/?I38D217C5 > > I've just discovered this press release from Forrester Research at the link > above has been updated -- I don't have the current version (see how quickly > things are changin??:-)) -- but here's the same story from yesterday, from > CBS.MarketWatch.com: > > Report: DVDs will soon be obsolete > By Jon Friedman, CBS.MarketWatch.com > Last Update: 11:40 AM ET Sep 2, 2003 > > NEW YORK (CBS.MW) -- DVDs and compact discs could soon be > obsolete, according to a report issued Tuesday by Forrester Research. > "CDs and DVDs will go the way of the L.P.," Forrester predicts. > > File sharing is responsible for almost $700 million of the $2 billion reduction in > CD sales since 1999, Forrester says, noting that movie companies face a similar > sales threat. > > The so-called "hard" media are in jeopardy, concludes principal analyst Josh > Bernoff of the Boston-based research organization. "By 2008, revenues from > CDs will be off 19 percent, while DVDs and tapes will drop 8 percent," Bernoff > said. > > By the end of next year, 20 million U.S. consumers will be spending $14 billion > annually on broadband connections, the report says. Streaming and paid > downloads will drive people "to connect to entertainment, not own it," the report > says. > > Gloomy trend > > Forrester points out that the gloomy sales trend for CDs is already under way, > as CD sales in the U.S. fell 15 percent during the past three years. Discussing > what it ominously calls "the slow death of the disc," the research group says > broadband, widespread storage and digital rights protection will make on-demand > music and movie services more popular. > > While consumers always pursue bargains and higher quality, convenience remains > the key attraction. > > "The idea that you have to get in your car, go to a store and buy (an item) is really > out of touch," Bernoff added in an interview. "The on-demand and cable access > services have all the advantages. All of the content is coming to cable." > > Jarring findings > > Bernoff's findings could eventually jar the entertainment industry. > > Compact discs arrived in the late 1980s and were promoted by labels as a > superior way for consumers to own music. The companies claimed that the quality > was far better -- even though rock and roll star Neil Young, among others, eventually > claimed bitterly that vinyl offered a clearer and more genuine all-round sound. Even > though the labels charged more than twice as much for CDs as for vinyl products, > the public snapped up CDs and vinyl labels were quickly consigned to be little more > than collectors' items. > > Meanwhile, sales of DVDs have been billed as the eventual lifeblood of the movie > business. Analysts have seen DVDs as the logical progression as a revenue source, > coming after cable television distribution and such retail stores as Blockbuster. > > The report's findings will affect the media and entertainment industry's largest companies, > including AOL Time Warner (AOL) , Walt Disney (DIS) , Viacom (VIA) and Sony > (SNE) . > > "Movie companies are reacting aggressively and moving from talk to action," Bernoff > said. "They're making it as easy as possible for you to download a movie and pay for it." > > Over time, Bernoff projected, his findings will be more vivid. "There are 10 million > people who now have video on demand and that number will be 20 million by the end > of next year," he said. > > "The big winners are going to be Internet portals and cable companies who can deliver > [video] on demand," he said. "The disaster is (potentially) for retail companies," such > as Blockbuster, Virgin megastores and Tower, which would suffer. "While labels will > survive, I'm very doubtful for the prospects of big music retailers." > > The solution is for the retailers to get the most out of the marketing appeal of their > well-established brand names. "Western Union is all about maximizing its brand name, > not delivering telegrams, any more," he said. > > "How did we get to these crossroads?" Bernoff asked in the report. "Broadband > connections, cheap and widespread storage, and ubiquitous processing power have > forever liberated media from physical objects like CDs, tapes and DVDs. But the > same technology forces that brought entertainment companies to the crisis point > contain the promise of media's salvation -- the ability to create media services that > consumers will pay for." > > >