The demise of Oppo Digital shows how far the market has moved away from physical video discs. However, the move is also pushing many dangerously close to their broadband data caps.
Chapter 1: Why Oppo Digital will not make disc players anymore (2:40)
Oppo Digital, the high-end maker of disc players and audio equipment, is bowing out of the U.S. market after a 14-year run. Looking at the data, it is clear why the company felt it could not continue. In the US in Q4 2013 the industry generated $2.8 billion in disc sales. Q4 2017 saw that revenue almost halve, generating just $1.5 billion. Disc rentals did little better. Physical disc rentals more than halved, falling from $500 million in 2013 to $200 million in 2017.
As well, consumers are no longer replacing their disc players when they break. Penetration of the disc player has fallen from 85% of U.S. homes in 2012 to 72% in 2017.
Disc player manufacturers like Oppo include apps on their devices for popular streaming services. However, streaming media players like Roku and Chromecast are a much cheaper way for customers to get this functionality.
Finally, the move to Ultra HD with high dynamic range (HDR) is unlikely to revive the disc market. Cheap streaming media players already support the new format. Major SVOD providers already have a lot of content available in the format. Most movies that are available to purchase or rent on Blu-ray UHD are also available in UHD in online digital movie stores like Vudu.
Simply put, there is no compelling reason for a consumer to purchase a new disc player.
Chapter 2: The problem with UHD streaming (9:45)
Cord-cutting consumers that have switched from a pay TV provider to a vMVPD like Sling TV or DirecTV Now may have a bandwidth problem. Normal television viewing through a vMVPD may already see them consuming 60-80% of their 1 Terabyte (TB) broadband cap. If they add a couple of Ultra HD (UHD) shows each day into the mix, they may easily exceed their bandwidth cap.
It is very easy to start watching several UHD shows each day. A new smart UHD TV comes with major SVOD services built-in. However, most of these services do not allow the consumer to control the streaming quality of a show. That means if the show is available in UHD it will be streamed in UHD to the viewer. Moreover, many of the newer shows on services like Netflix and Amazon are all available in UHD.
The easiest way to control bandwidth consumption is to buy a streaming media player like Roku. Simply force the video quality setting of the device to be set to HD, not UHD, and SVOD services will only stream at HD quality.