Disruptive technologies. Netflix and streaming video


Movie studios may have to write down the value of their movies because plunging DVD sales have cut into profits. The primary reason for this is Netflix and streaming video.

“Making a movie just won’t be as profitable as it once was,” Barclays Capital analyst Anthony DiClemente in New York said in an interview. “There will be a complete bottoms-up reconstruction of the economics of the film business.”

Which is precisely what the music business is going through too, kicking and screaming the whole way.

The future is digital, bits and bytes, with “hard copy” product not required. Hard disks are cheap and cloud storage (Google is rumored to be about to launch such a service) will provide ample, inexpensive storage. The iPod and devices like it are increasingly how we will watch video and listen to music.

Meanwhile, two businesses, record labels and movie studios, that are mostly run by dinosaurs trying to hold on to the old ways, are failing to keep up with the technological changes.

I mean, they’re just now figuring out that music CDs and movie DVDs are going away? Steve Jobs understood that years ago.