What will it take for physical media to go away?

While writing my blog post on 4K UHD TVs I started to go off on a tangent about what it would take for physical media to become obsolete and lose any benefit to using it to watch movies over streaming (music has already lost its physical media appeal thanks to the dropping of DRM). So here is my take on what will need to happen to lead to the downfall of movies on physical media and cause regular people to consume the majority of films through online streaming.

Free, seamless upgrades

Depending on how old you are, you remember going from VHS to DVD and/or DVD to Blu-Ray. You remember having to go out and buy a new player to support the new format. You also had to deal with waiting for films to come out in the new format. Then you waited for films to come out that actually took advantage of the new format (remember early Blu-Ray films which were poorly upscaled to HD?). And all the while you had to make the choice of whether you wanted to purchase yet again your favourite films to appreciate them in their higher resolution glory (or if you are a Star Wars fan, whether the visual upgrade made up for George Luca's revisionist history of the story). And it's going to start again with 4K content.

When you watch films using a subscription streaming service like Netflix or Amazon Prime Instant Video you get the upgrade for free. There is no new copy to buy or having to pay some price increase to justify the higher quality version of the film. You simply are given the increase in quality.

Not only that, all you have to do is upgrade some software on your streaming player and you get to watch higher quality films. No trying to figure out what new player to buy, waiting for it to reach stores/online, buying it, hooking it up, and then setting it up to watch Breaking Bad in 4K. You just have to wait for some software to download and install, then you're ready to go.

Cheaper pricing, greater availability

When a film is on a streaming service that you subscribe to you don't worry about cost as it's built into your monthly fee (unless it gets taken off the service). But let's say a film you want to watch or own isn't on your preferred streaming service. How much would it cost to rent or own it (in HD, of course)?

Let's consider a recent release, two award winners from 2012, and a very popular TV show.

iTunes Google Play Amazon.ca
Rent Own Rent Own Blu-Ray
Despicable Me 2 CAD 5.99 CAD 24.99 CAD 5.99 CAD 22.99 CAD 24.97
Silver Linings Playbook CAD 5.99 CAD 24.99 CAD 5.99 CAD 24.99 CAD 19.93
Argo - CAD 24.99 - CAD 24.99 CAD 14.99 (from Future Shop)
Game of Thrones, season 2 - CAD 43.99 - - CAD 46.99

Looking at this it seems digital ownership is not worth it compared to Blu-Ray; at best you save CAD 2.00 and at worst over-pay by CAD 10.00. And you still can't rent every film digitally which seems ludicrous since there probably is no such thing as phyiscal rentals for you unless a RedBox kiosk is near you.

Also note that owning a film digitally does not mean you will get the eventual 4K upgrade for free either. If the whole SD/HD purchasing situation is any proof then you will have to re-purchase your films in UHD in order to get the quality upgrade.

Portability & no vendor lock-in

Ignoring the price issue, let's say you buy a digital movie on iTunes. How do you watch it at your friend's place? If they have an Apple TV I assume you would use AirPlay if you brought your laptop with you or logged in under your account on their Apple TV. You could also plug your MacBook directly into the HDMI port of the TV and stream from your laptop directly.

Google actually has a much better story here thanks to Chromecast. In that situation you either take your Chromecast with you or spend the USD 35.00 to buy them a Chromecast as a gift and play from your phone (Android or iOS). Unfortunately for Canada, Chromecast has not made its way up here. But it does do a lot to help with the portability of digital movies when it is available.

But what if you leave the Apple or Google ecosystem where you bought your movies? I could imagine one day no longer having an Apple laptop, so what happens to my iTunes movies? Unless I make sure I always have an Apple TV, I'm basically screwed.

It's that digital lock-in that really makes having digital movies cost the same as physical media sting so much. If you had the option to download a copy of your movies without DRM in case you left a provider, then I wouldn't mind so much. Or if the price was lower for a digital film such that losing access to movies I bought didn't bother me I could also tolerate it. But when at best you save CAD 2.00 it just makes it entirely not worth it. And UltraViolet doesn't help this issue as you still have to tie your films to a provider so you end up with the same vendor lock-in issues.

Current solution: rent digitally, buy physically

You should rent any and all films you don't think there is a chance you will watch more 5 or more times at the current quality available to purchase (math.ceil(24.99/5.99) == 5). That way you save money and make sure to always watch a film in the best quality available.

If you do think you will watch a movie annually you should buy it on physical media. You have a better chance of getting the cheapest price, you have portability, and no vendor lock-in. A rule-of-thumb that I like is if you think you will watch a film at least annually then it is probably worth buying on disc (this also typically means you like a film enough to recommend to your friends and thus you will want to lend it to them).

Until either lock-in goes away or buying digital films becomes substantially cheaper, it just isn't worth passing over Blu-Ray discs for those films you really enjoy watching. Otherwise just rent the films if they are not on Netflix.