At least initially, it appears that Microsoft's (NASDAQ: MSFT) deal with Disney (NYSE: DIS) to sell downloads of Disney feature films through Microsoft's Xbox Live does not represent an immediate, substantive threat to dominant DVD outlets, including Blockbuster (NYSE: BBI) and Netflix (NASDAQ: NFLX), but as is the case with most technological volleys in the digital age, more time is needed to see if consumers are willing to make a purchasing shift.Blockbuster, Netflix, and DVD sellers like Best Buy (NYSE: BBY) can feel confident that their respective market shares will not evaporate overnight, due to their primary advantage: reach. Currently there are about 11.6 million Xbox 360 consoles in use, including 5.6 million in the U.S. In comparison, penetration of DVD players in U.S. households exceeds 50%.
That fact, combined with DVD players' likely continued affordability relative to Xbox hardware, should help maintain the DVD player's healthy lead, and by extension the contemporary DVD movie distribution/sales system, for the immediate future, even given the enhanced HD quality that Xbox Live downloads may offer.
But longer term, as gameplayer ownership increases, the Xbox/gameplayer movie distribution option represents a market share antagonist, one that may very well compel the contemporary distributors to volley back. That return volley may include further reductions in DVD movie list prices and/or faster delivery times (under 8 hours) to keep pace with the postmodern entertainment consumer's demanding mantra of more choices, quick delivery, and convenience.
On Wednesday, Microsoft closed up 16 cents to $29.49, Disney gained 9 cents to $33.98, Blockbuster fell 4 cents to $4.43, Netflix declined 11 cents to $20.01, and Best Buy fell 5 cents to $47.46.
But longer term, as gameplayer ownership increases, the Xbox/gameplayer movie distribution option represents a market share antagonist, one that may very well compel the contemporary distributors to volley back. That return volley may include further reductions in DVD movie list prices and/or faster delivery times (under 8 hours) to keep pace with the postmodern entertainment consumer's demanding mantra of more choices, quick delivery, and convenience.
On Wednesday, Microsoft closed up 16 cents to $29.49, Disney gained 9 cents to $33.98, Blockbuster fell 4 cents to $4.43, Netflix declined 11 cents to $20.01, and Best Buy fell 5 cents to $47.46.
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