Can Internet Video on Demand actually deliver?

The structural advantage of DVD/Blu-Ray over Internet Video on Demand

While the appeal of instant access to an unlimited selection right from home is tremendous indeed, physical formats have a deciding advantage: their distribution costs are independent from picture quality.

It costs the same to stock a Blu-Ray disc than to stock a DVD. It will cost the same to stock the successor to Blu-Ray. On the other hand, Video on Demand services will always have to find a delicate balance between picture quality, download times, and hosting costs.

In other words, physical formats will always be the quality leader. To prevail, Video on Demand will have to combine decent quality, instantaneity, and competitive pricing. Whether that is possible or not, depends solely on the state of the Internet infrastructure.

Next page: Infrastructure constraints limit the appeal of Internet Video on Demand


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