Will Blu-ray Discs Be the Real Casualty in Amazon's Current War?

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Will Blu-ray Discs Be the Real Casualty in Amazon's Current War?

disc-ambulance.jpgMany people have already declared physical media to be dead or at least, by Princess Bride standards, mostly dead. Hard as it may be for those people to believe, some of us still like to buy discs. AV enthusiasts often like to own physical copies of our new favorite demo discs, and we still prefer the picture and sound quality of Blu-ray over streaming services like Netflix and Amazon Instant Video. The Digital Entertainment Group recently put out its Mid-Year 2014 report, which found that Blu-ray disc sales were up 10 percent through the first half of this year, so clearly people are still buying. The problem for any disc lover, however, is that it's growing increasingly difficult to walk into a store and purchase a Blu-ray disc. Sure, if it's a blockbuster movie release, you'll likely find it at your local Best Buy, Target, or Wal-Mart; but, if the film veers even slightly off the mainstream path, the Internet is pretty much your only option to find and buy the disc.

Amazon has long been my go-to destination when I want to purchase a new Blu-ray disc (or CD, for that matter), and I know I'm not alone in this. Unfortunately, Amazon's favorite new tactic in contract negotiations with distributors is to use disc sales as leverage. Over the past few months, the e-tailer has prevented the pre-order of big-name titles from both Disney and Warner Brothers while the companies hashed out their various issues. Before Warner Brothers' The Lego Movie officially went on sale on June 17, Amazon customers could not pre-order the disc, although they could pre-order the digital download from Amazon's own Instant Video Store. Warner and Amazon eventually resolved their differences. Now, as I write this in mid-August, the same thing is happening with Disney titles like Captain America: The Winter Soldier and Malificent.

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(By the way, Amazon is using the same tactic in its current e-book pricing dispute with publisher Hachette, refusing to take pre-orders on some books and delaying shipment on others. This prompted a number of high-profile authors, including Stephen King and John Grisham, to sign a letter of protest written by author Douglas Preston that appeared as an ad in The New York Times. Even Stephen Colbert weighed in on the issue on his Comedy Central show.)

Look, we've all grown accustomed to these ugly and oftentimes very public negotiations that deprive us of the content we want (and are willing to pay for). Many of us have, at some point, lost a coveted pay-TV channel and access to our favorite show because our cable/satellite provider was renegotiating with a certain content provider. Amazon is the largest online retailer in the world, and it has the right to sell or not sell whatever it wants and deal with the repercussions, if there are any. This Bloomberg article suggests that CEO Jeff Bezos isn't terribly concerned that these tactics will push away consumers - many times, these battles help Amazon lock in lower prices, so customers are prepared to give the site a lot of leeway.

At the end of the day, is it really a big deal to shoppers if they can't pre-order a disc? Once Captain America: The Winter Soldier officially goes on sale on September 9, you'll still be able to buy the disc from Amazon (presumably). You just can't pre-order it now, which is a minor inconvenience to us but could�have the power to affect early disc sales and best-seller lists, which certainly gets the attention of distributors that are always trying to make the most of a title's momentum. Of course, other e-tailers like Best Buy and Barnes and Noble, hoping to capitalize on any discontentment from shoppers who don't want to wait, are more than happy to take pre-orders on these discs. So it all works out in the end, right?

What concerns me about Amazon's current tactic is how it will affect the health and longevity of the Blu-ray and DVD formats in general, which are already taking hits from the streaming and download categories. That same DEG report I mentioned earlier shows that, while Blu-ray disc sales were up 10 percent in the first half of 2014 (compared with 2013), electronic sell-through (aka digital download) was up over 36 percent and subscription streaming was up 26 percent.

It's not like Amazon is simply refusing to sell all of Disney's new home-video releases while the two companies negotiate. No sir, the e-tailer is more than happy to take pre-orders on the digital copy of Malificent, clearly trying to drum up more user traffic for its Instant Video Store and sending an obvious message about where physical media falls on the priority list. What happens if a meaningful amount of Amazon's huge customer base decides to pre-order the download in lieu of the disc? AV enthusiasts are likely to wait or go to another site to pre-order the disc, but will the more casual movie fan just opt for the download instead? If so, the sales numbers skew even further toward digital downloads.

And what if the negotiations get even more heated, and Amazon chooses to expand the ban to include discs that are currently selling? Disc sales take an even bigger hit, and downloads potentially see an even bigger bump. The studio(s) may be hurt in the short run, but the disc format is the one in real peril. We all know the day is coming when the studios will decide that packaged media is not selling well enough to justify the production costs. Could Amazon's actions hasten that day's arrival? I'm afraid so.

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