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Yes, Blu-ray Is Better Than Streaming Video. But It's Also Obsolete.

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Despicable Me 2 is the best-selling Blu-ray disc on Amazon. Source:

Almost since it came into being with the release of Sony's (NYSE: SNE  ) PlayStation 3, Blu-ray video discs have been dogged by doubts. Is the technology really that much better than DVD? Can it survive in the era of cable video-on-demand and Netflix (NASDAQ: NFLX  ) ? Or was the CEO of Roku right last year, when he predicted the demise of Blu-ray "by 2016"?

Well, the facts are in, and the verdict is: Yes, Blu-Ray is better than DVDs. It's better than streaming, too, providing cleaner, crisper imaging, more room for movie "extras," and overall a much-improved movie-viewing experience.

But Blu-ray is also toast. It's obsolete. Netflix, and other streaming services will bury it -- and within a few years, hardly anyone will remember that Blu-ray ever existed.

Why buy Despicable Me, when you can rent it? At these prices, it's a one-click bargain! Source:

Mining Amazon's trove of secret customer data
How do we know this? By examining what video consumers say about Blu-ray -- and comparing it with what they actually do. For data, we turn to (NASDAQ: AMZN  ) , the nation's preeminent purveyor of all things digital -- Blu-ray, DVDs, and video streams included.

An obsessive-compulsive cruncher of numbers, Amazon keeps track of what its customers are buying in real time, and updates its findings constantly, for public review, in a set of pages exhibiting the "best sellers" on its website. These pages are how I learned, for example, about the previously unknown television manufacturer that in 2013, became the vendor of the best-selling flat-screen television set in America. They're also how I discovered that Blu-ray is already on its way out.

Blu-ray: By the numbers
At first glance, Blu-ray actually looks to be holding up pretty well on Amazon. On the website's list of the "most wished for" movies and television series among its customers, Blu-ray versions of such hits as Despicable Me 2, Man of Steel, and The Hobbit occupy five of the top six slots.

That sounds like good news for Blu-ray. After all, Amazon charges roughly 15% more for a Blu-ray version of a hit movie, than for a simple DVD version. At first glance, it appears that customers recognize the value in the better Blu-ray experience, and are prepared to pay up for the privilege of enjoying it -- but that's just at first glance. Look closer, and the future appears less bright for Blu-ray.

Remember that this is a list of movies that Amazon customers wish other people would buy for them. These customers are "playing with the house's money." They're not actually footing the bill for the higher cost of a Blu-ray movie themselves but rather are asking other people to pay it for them.

But when it's the customers' own money on the line, how do they spend it?

Cheapskates of the world unite! Rise up and throw away your Blu-rays!
You guessed it: They don't pay up for quality at all. They economize. They pinch their pennies, hold their noses -- and buy lower-quality DVDs or video streams instead. Turning from Amazon's list of "most wished for" to examine the movies people actually bought (a.k.a. the "best-sellers"), we find that all 19 of Amazon's 20 top sellers in the video and television series segment were ultra-cheap $1.99, $2.99, $3.99, and $4.99 video streams. One item -- a preorder of the latest season of PBS's Downton Abbey -- is in DVD format, $5 cheaper than the Blu-ray version.

But Blu-ray? To find someone actually paying up for a physical Blu-ray disk, you need to go all the way down the list to item No. 25, which was -- you guessed it -- a Blu-ray version of Despicable Me 2.

What it means to investors
At the risk of being blunt, this is not good news for the companies that have invested millions of dollars in first developing Blu-ray technology, and then in building factories to manufacture Blu-ray players -- companies like LG and JVC, Sony and Philips (NYSE: PHG  ) . Their marquee product, and the device they hoped would turn millions in investments into billions in profits, is already on its way out of style.

Sony, the biggest backer of Blu-ray on the planet, also owns the No. 1 best-seller in the "Blu-ray Disc Players" category on Amazon, the Sony BDP-S5100. But if you read the device's description carefully, you can see why: In addition to playing the discs, this player is also equipped with Wi-Fi.

The moral of this story? Even folks who do buy Blu-Ray players seem to be planning ahead for the day when the technology is toast. At least when that happens, their BDP-S5100s can keep on streaming.

Sony hedges its bets with the BDP-S3100 Wi-Fi streaming Blu-ray player. Source:

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Read/Post Comments (23) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2014, at 5:59 PM, jesterisdead wrote:

    Obsolete or not having caught on yet? DVDs are still being released, because the majority of people only have DVD players. Once that situation changes, prices will drop and those wanting to purchase a higher quality copy of the disc will have no place, but to turn to Blu-Ray.

    The biggest obstacle is the drive itself. The average laptop ships with no optical drive, with only 15 of around 700 laptops on Best Buy offering a Blu-Ray drive.

  • Report this Comment On January 04, 2014, at 9:10 PM, mdeamer wrote:

    Once DVDs become less profitable, the industry will phase them out. See VHS.

  • Report this Comment On January 04, 2014, at 9:31 PM, MyCruiseWright2 wrote:

    Netflix and amazon movies play to blu-ray. I bought my HD tv for the incredible picture experience and blu - ray gives the best picture with less interference because they don't have to deal with a constantly clean internet stream. Why anyone buys movies is too, I rent blu-ray from net-flix, and redbox which charges $1.69 for all the newest releases.

  • Report this Comment On January 04, 2014, at 10:09 PM, wcmartell wrote:

    Completely wrong.

    One good EMP and everything is wiped out, leaving you with nada. Add to that, one good virus will destroy all electronic data... and virus wars are a thing of the present.

    Only physical media will survive, so unless you have BluRays, you're SOL.

    By the way, same goes for any electronic form of investment. It's all doomed.

  • Report this Comment On January 04, 2014, at 11:31 PM, Artie wrote:

    If an EMP wipes out everybody's electronic data, I think they're going to be a lot more worried about getting food and water than whether their copy of Despicable Me2 is still any good.

  • Report this Comment On January 04, 2014, at 11:52 PM, Didact328 wrote:

    So, the Blu-ray is made obsolete by a streaming service with a limited library that, while improving some, is still mostly composed of garbage? What a load. I also think there's something very important the author has completely ignored. People want to actually own their movies. Even with on-demand services like Amazon Instant Video or Vudu, you don't legally own anything you pay for. Just check their terms of service. They're only leasing the movies to you. Makes it kind of ridiculous that they often expect you to pay as much for a digital movie as you would for the physical version, huh?

  • Report this Comment On January 05, 2014, at 10:15 AM, wgcross2 wrote:

    Blu-Ray obsolete? Maybe, maybe not. Sony risked alot in the first place. Reminded me of BetaMax vs VHS, VHS won. Or IBM's proprietary Microchannel architecture vs ISA/EISA, ISA won. Based on this history and the reasons for, I would have bet against Sony. Obviously, Sony isn't doing so well as I see movies advertised as a packaged bundle having both Blu-Ray and DVD. Not so good. I don't want to pay more and get stuck with a Blu-Ray disk to boot. DVD is fine for me. Blu-Ray is a superior technology and its storage capacity is robust. But it may be an overkill.

    DVD's will remain. Hello. Many people have extensive DVD libraries/sets. Streaming or the cloud? The cloud, not likely. I want my shows/movies locally. Besides, upload speeds are absolutely dismal in most cases. Streaming? Well internet speeds vary considerably across the nation or even within a given state/region. We're not there yet. Any transformation will not be as easy as VHS to DVD. Why would DVD's be obsolete? There is nothing wrong with them.

    If you insist on one of those over-hyped, over-priced toys/tablets then you will need the cloud most likely. The smart phone? Yeah right.

    Stop with the "death of" rhetoric. Viable technology has a long life inspite of marketers/advertisers trying to get people to constantly spend money they don't have on the latest and greatest.

  • Report this Comment On January 05, 2014, at 1:20 PM, taiwan wrote:

    When you talk about Blu-ray and DVD's, you cannot simply talk about technologies. It's not always about technologies. People forget about content providers. I say this again. Movie industry does not want consumers to have master quality content they can pirate. Therefore 4K will never gain enough traction, not to mention there isn't anything in the drawing board that was proposed to replace Blu-ray. Nobody is going to buy 100" TV which will show the benefit of 4K. It's not about technologies. Most homes cannot accommodate 70" or larger TV. Blu-ray sits at the perfect sweet spot for both the movie industry and the consumers. Blu-ray's 1080p is the limit for 99.99% of TV sold around the world because market for 70" or larger TV is quite small. It's difficult to download via internet. Even if you have FIOS it's not practical to download a dual layer Blu-ray. Blu-ray offers unmatched picture quality against anything you can stream. Most people still want physical medium of movies they want to keep.

    My conclusion is Blu-ray will be around for at least 10 more years, if not 30 more years. Why did I say 30 years? Because CD has been around for more than 30 years. Nothing is going to change the fact that most people are not going to move into a bigger home and buy 100" TV's ten or twenty years from now. If you can't have bigger TV and if movie industry doesn't want to release 4K to consumer then Blu-ray will remain the format of choice for both consumers and movie industry.

  • Report this Comment On January 05, 2014, at 1:48 PM, Puppychownyc wrote:

    I live in household where Verizon Fios is split SIX WAYS. I would luv to go streaming only (I have Hulu Plus and Amazon Prime), but half the time someone is hogging bandwidth and I can't watch on streaming. For me at least, I won't be ditching my dvd and blu rays anytime soon.

    I agree w/ taiwan that blu ray will still be around, b/c of the 1080p issue (which the author of this article totally ignored). In addition, I don't believe dvds will be phased out any time soon. There are still far too many households/consumers with dvd players only; Hollywood will not be able to ignore these consumers by switching to blu ray only releases.

  • Report this Comment On January 05, 2014, at 2:53 PM, uartComm wrote:

    Most experts talk about the "last mile" what connects millions of homes to a network that supports mass streaming. Broadcasts worked a long time because one over-the-air stream connected to millions economically. Replace that with an expensive and aging infrastructure - not likely to see mass adoption for cheapskates seeking hi-def entertainment on demand.

    As long as a minority is willing to put up with "state of the art" streaming video it will do. Dump tens of millions and the stream thins out a bit (quality goes down). So people will face the prospects of paying more for quality connections - or settle for less and less.

    Seems to me DVDs and Blu-Ray will always deliver the goods well away from a wire even when the net starts to choke.

  • Report this Comment On January 05, 2014, at 5:35 PM, TransistorMan wrote:

    The year wouldn't be complete without someone proclaiming that physical media -- in this case, DVD or Blu-ray -- is toast/doomed/not long for the world. I'm not sure why, but it seems that we are compelled to see "old" technologies quickly and thoroughly killed off by "new" ones -- the quicker the better. In reality, this rarely happens as expected, because there are attributes of most technologies that help them remain suitable in ways that the expected replacement cannot match. For example, streaming is convenient and immediate, but it has some fundamental flaws that will keep physical media around for many years to come:

    1. Content availability is unpredictable with streaming services. A film that's available today may not be tomorrow due to licensing deals that expire, sudden cost increases, etc. Discs are always available to you on your shelf whenever you want them -- no third party company up in the cloud can control your access to them.

    2. Bandwidth limitations in many places prevent streaming from replacing discs everywhere in the country. Not everyone has access to the Internet, and many of those who do may not have very fast or dependable connections. On the other hand, anyone can buy a disc player for well under $100 and plug it into their TV, providing a highly reliable and inexpensive way to consume content without recurring access or subscription costs.

    3. Quality variations can be substantial with marginal streaming connections. Anyone who's had their movie or TV show suddenly interrupted by some unexplained choking of their data connection or buffering error knows how irritating this can be. We put up with it for a bit, but if it happens two or three times in a single program, we are tempted to throw the streaming box through the window. Discs don't have this problem (other than your kids leaving peanut butter smears on them, but that's a different issue).

    Decades ago, wise pundits were telling us that paper was obsolete -- soon, we'd all be working in paperless offices! No more need to kill trees! Turned out that the equation was a bit more complex than those folks realized, as paper continued to thrive...everywhere. Again, different media -- physical and electronic -- had attributes that fulfilled different needs.

    The moral of the story is that different media can coexist for many, many years. There is no need to kill one off to make room for another one -- streaming and discs have different benefits that can make consumption of content more fulfilling (I don't want to own everything I watch, but I do want to own some of it). I am glad to have both of them in my house.

  • Report this Comment On January 05, 2014, at 5:55 PM, FilMWatcheR wrote:

    I still play Laser Discs. & don't forget Vinyl Records are making a great comeback. I have Netflix and the number of times it stops after a few minutes depending on the time of the day I watch makes my blood boil (I only got it to watch Arrested Development season 4). The shop where I work had the launch of 'UltraViolet' and one of the developers told me it was rushed and not very good.

  • Report this Comment On January 05, 2014, at 6:31 PM, fujidan wrote:

    For me anyway DVDs and Blu Rays are not and will not be obsolete. I do not want to stream videos. I do not have cable or even an antenna. I buy what I want to watch. As long as my player works I am happy. There is no storm interference and no dealing with third parties.

  • Report this Comment On January 05, 2014, at 11:11 PM, FFNogoodnik wrote:

    Obsolete: no longer produced or used; out of date.

    Blu-Ray discs are still used and produced so they are not obsolete.

  • Report this Comment On January 05, 2014, at 11:54 PM, taiwan wrote:

    Because of Blu-ray's 1080p resolution and impossibility of streaming Blu-ray quality over the internet, Blu-ray will be around for a very long time. It doesn't even need to worry about competition from 4K because there is nothing proposed to replace Blu-ray, and you need at least 70" TV to notice the difference between 4K and 1080p. Market for that kind of size of TV is tiny.

    If you live in an apartment you know the 70" TV won't fit inside the elevator. As for the new Samsung 100" TV, it won't even let you carry around in the staircase. If you don't have these kind of TV then 4K resolution won't matter at all. Studios are afraid of releasing master quality videos for consumers to pirate. There are so many obstacles for 4K and some can never be resolved.

    Most Blu-ray players include streaming apps for the sake of convenience, not because manufacturers expect Blu-ray to be replaced by streaming.

    In the end Blu-ray will be the perfect product for consumers and movie studios.

  • Report this Comment On January 06, 2014, at 8:53 AM, cjb44 wrote:

    Of course all of the good recent movies aren't available to stream on Netflix and Amazon still charges almost the same for downloading the same.

    Blurays aren't going away because the rental disk market is still huge. Redbox and Netflix by mail show that. Until everything is available streaming it's not happening.

  • Report this Comment On January 06, 2014, at 1:05 PM, KingMing666 wrote:

    I think some people forget, if you are reading this article, chances are you are more intelligent than to believe in the hype and understand the technology. But the populous doesn't understand ... Remember Laser Discs they were the best way to see a movie, at one time only way to see a movie no PAN n Scan but the masses didn't care and laser disc failed , especially once Easy and Convenient and more durable than VHS ... DVD came along... if not for 16x9 tvs I am sure much of the masses would still argue about merits of Full Screen Movies, not understanding Widescreen,letterbox is how the movie is intended to be...

  • Report this Comment On January 06, 2014, at 2:37 PM, OneBgBdArtemis wrote:

    I don't how many smart people have tried this lately....but uhh, when you're in the middle of a oh say, snowstorm, or your internet provider has their lines chopped you DON'T have access to those streaming services. My bluray and HD DVDV player still functions LONG after I fire the cable company for providing me with subpar internet service. Give me a physical copy any day. In fact, here's a perfect example. So I work 3 hours from home and I stay for the week. I have a VUDU subscription which lets me access my UltraViolet titles that were freebees from purchasing Bluray dvds. I can't get VUDU on my Kindle HD, so I have a Flixter account. It is linked to my UltraViolet account and I downloaded the movies I OWNED to my Kindle HD. I get to the place I sleep at and lo and behold guess what, no internet. No problem, I've got movies downloaded to MY Kindle HD. Yeah, well...guess what. NO access to those movies through flixter UNLESS you can log in online. So, an APP is using MY hd space and the movies, but cannot be accessed without internet? NO thank you. You keep your online uncertainty and never proving ownership online streaming nonsense. Same goes for my PS3..all the untra violet movies I OWN are stored on the hd but cannot be accessed unless it's online. I'd pretty friggin' p.o'ed if I had actually bought a streaming copy of anything and not have FULL access to it from my HD if I'm not online.

  • Report this Comment On January 06, 2014, at 8:29 PM, Didact328 wrote:

    @KingMing666 I know, right? I used to intentionally buy full screen even when movies were being released in widescreen. Now I don't know how I ever thought it was worth having so much of the picture cropped out just so the film fit the the old 4:3 screen.

  • Report this Comment On January 06, 2014, at 8:36 PM, Didact328 wrote:

    @OneBgBdArtemis It also seems like Vudu periodically has to buffer during playback even on a good Internet connection. Downloading to the harddrive is the obvious workaround, but I think most devices supported by Vudu lack that option.

  • Report this Comment On April 06, 2014, at 6:27 PM, moonjill wrote:

    I enjoy Blu-Rays the best. The picture quality and sound is outstanding, and fantastic! I have 20+ Blu-Rays so far and I love every minute of them. Don't need no Internet to play Blu-Rays! I also like the prices are worth the risk then paying for a cheaper online stream service when the picture quality is lame. I would seriously go for the Blu-Ray discs. Plus, you do not own the file, with a disc, you own it for life!

  • Report this Comment On September 05, 2014, at 3:49 PM, colby wrote:

    Great thread here.

    Have to agree with most of the comments. I have a 55' 1080 with quality audio. I've been a fan of DVD since it came out and also own many BD's. I share my discs with family and friends...and its an easy process for all.

    While I do not ignore the tech advances and continued growth of Netflix etc....I opted into Netflix and sampled VOD etc. Yep, I could click a button and had access to a program....but my personal excitement with digital lasted about 6 months.

    Went back to sticking in a Blu, hitting play, and enjoying..not to mention, we have 3 small children...grab a DVD for those road trips...insert, hit play...Life has enough complications for parents these days. BD and DVD are simple and will be around for a long, long time.

  • Report this Comment On September 12, 2014, at 2:35 AM, MariahQ wrote:

    The article isn't saying that some people won't cling to their DVDs. It's saying that the vast majority will abandon the format in favor of streaming video services. I am one who will squirrel away three or four DVD players and continue to watch DVDs, but I definitely foresee that all DVDs, blu-ray included, will go the way of the VHS tape. Didn't many of us own hundreds of those too? Where are they now? Where are the VHS players to play them on? Very hard to find.

    Everyone is talking about movies, but what about television programs? Right now you cannot find old favorite television shows on streaming services unless they were mega-popular like Cheers. I would like to watch 1950s-era television shows from before I was born. Where are they? Disappearing from the face of the earth. You can't even find 1940s movies on these services.

    As long as all you watch are blockbuster films or recent movies, streaming is there for you. If your taste runs to independent, foreign or art house fare, you're going to be out of luck if you aren't already.

    Don't forget streaming services don't own this content. They license it, and every year they delete a whole bunch of it. Who is going to preserve it? Or will be all resign ourselves to just forget everything that happened more than 20 years ago?

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