Technology : Bad time to slip a disc

In the US, DVD sales fell 3.2 percent last year to 15.9 billion, the first annual drop in history, with experts projecting another decline this year, to 15.4 billion, and a similar dip next year, Instead of celebrating the Blu-ray format studios are scrambling to introduce an array of initiatives aimed at propping up the broader market.

Sales are sagging for various reasons, including a flooded marketplace and competition for leisure time, but the Internet is perhaps the biggest enemy. Tech companies have watered down the DVD market by aggressively pushing Internet downloads. Apple's iTunes now offer downloads of 500 movies. Meanwhile, telecommunications providers like Time Warner and Comcast are pushing their faster broadband lines by promoting them as being capable of delivering fast downloads.

Movie studios are fighting back by taking a page from the Internet playbook. Indeed, the centrepiece of the market rejuvenation effort is something 20th Century Fox calls "digital copy". Fox DVDs now come with an additional disc holding a digital file of the title. Consumers can download the file to a computer in about five minutes and then watch the movie there or transfer it to their iPod. Sony Pictures Entertainment, Universal Studios, Walt Disney and Warner Bros are also pursuing their own versions of the idea.

Tom Adams, the founder of Adams Media Research, said the packaging of digital files with standard DVDs "has the real potential to steal the thunder from the Internet delivery of movies" while John Freeman, an industry analyst, sees the effort as a stall tactic. Although digital copies are "a step forward", he says, that step is tantamount to Hollywood admitting its lucrative hard-goods business is growing obsolete.

Troubles big and small started buffeting the DVD business in 2005. First, overall sales of television shows on disc started to slip as releases lost their freshness and consumers realised they were devoting a lot of living room space to bulky boxed sets they never watched.

Today, digital files on discs; tomorrow, mass downloading straight from the Internet.

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