Europe Ditches Disc Distribution: What Happens to 4K Blu-ray?

As I was strolling down a main drag in Athens, Greece, last week, I spied a group of shoppers browsing through some outdoor boxes and racks in front of a store with a sign that proclaimed “The DVD Shop: The Ultimate Experience.” (Yes, the sign was in English, not Greek.) Except none of the shoppers were shopping for DVDs or Blu-ray discs. Instead, the boxes and racks were filled with clothes. The disc store was gone, and the new owners hadn’t changed the sign yet.

Welcome to the collapse of the European disc business. And, with it, perhaps the stillbirth of 4K Ultra HD Blu-ray, due this Q4.

IFA, the annual European electronics show held each fall in Berlin, held its also annual Global Press Conference last month in Malta. Included in some press briefings were dire discussions about the ongoing disc business and Blu-ray player sales in Europe. Apparently, DVDs and Blu-rays have disappeared in the Old World, and are now found only in flea markets (where I spotted a DVD/BD store in a tourist trap area of Athens) and in impulse racks by supermarket checkout counters.

Hollywood studios might also be abandoning Europe, disc-wise. Three months ago, Paramount signed a deal to let arch-rival Universal distribute its disc titles in Europe—this is essentially like asking the Star Wars people to distribute Star Trek gear. (Although now that J.J. Abrams is handling both star space franchises, maybe that’s not such a dogs-sleeping-with-cats proposition. But I digress.)

The new video distribution paradigm

The decline of the European disc business is helping to augur in a third era of video distribution. The first was VHS (and/or Beta, if you want to be a stickler), the second was DVD/Blu-ray and the third is streaming.

Each method, as in many things technological, obsoletes the previous method. And Europe may simply be the first disc distribution domino to fall to streaming, thanks largely to the quicker-than-anticipated uptake of smart TVs.

DTC projects smart TV sales will reach 60% of all TVs sold worldwide this year, and will represent 83% of TVs sold by 2019. These growing smart TV buyers are in the first and second demographic waves of what marketers call early adopters and early majorities. These earlier-than-thou adopters represent around half the overall market, but are by far the most likely to pay for distributed content, whatever its source.

How this disc-to-streaming transition will affect the coming 4K Ultra HD intro is anyone’s guess, but it can’t be good news for Blu-ray hardware makers. UHD BD may have a small window to reach early UHD TV adopters given the relative dearth (and quality) of 4K streaming content. But with the growing number of original and catalog 4K streaming titles becoming available, that window won’t be open long.

The success or stillbirth of UHD BD may rest entirely on the willingness of Hollywood studios to push out an overwhelming force/critical mass of titles earlier than later to tempt UHD TV owners, especially those with insufficient 4K streaming broadband connections.

But even though all new films are shot to be 4K-compatible, studios may not be willing to spend the money on the necessary packaging and marketing of UHD BD since 4K streaming the same title requires none of former. Plus, the Netflixes and Amazons of the world would handle the latter.

And now that Paramount has pretty much said “nah” to disc distribution in Europe, we may have our answer about Hollywood’s willingness to actively support a 4K Ultra Blu-ray roll out.