This is no time for 'stop the future, I want to get off'

IT IS “the end of the digital beginning”, PricewaterhouseCoopers declared this week in its annual Global Entertainment and Media…

IT IS “the end of the digital beginning”, PricewaterhouseCoopers declared this week in its annual Global Entertainment and Media Outlook – or so it says on this printout of mine.

I can only assume the Churchillian flavour of the soundbite is deliberate and that PwC expects a few more years of bloody battle in the civil war between the inky-fingered analogue loyalists and their avatar opponents.

Conversely, it’s not the end, but very much the beginning of the end for physical media. PwC maps out the ongoing power-shift. The video games industry, set to be the fastest growing segment of what PwC calls “consumer/end-user spending” in entertainment and media, will see global spending on online and wireless games overtake console and PC games in 2013.

Spending on digital (non-physical) music formats will surpass physical distribution in 2015 – digital formats already accounted for a third of music revenues in 2011 and, let’s face it, so many musical icons have shuffled off in 2012 that posthumous sales on iTunes at the very least must be through the digital roof.

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Some segments are digitising faster than others. For all the headlines generated by the fact Amazon’s eBook sales have overtaken its post-and-packaging business, electronic books took a paltry 5 per cent of the total market in 2011. In 2016, book publishers will still be doing their bit for their friends in the paper and pulp industry, with physical books retaining an 82 per cent share, PwC predicts.

In filmed entertainment, home video products (both rental and purchase) will continue to account for 64 per cent of the market in 2016, PwC forecasts, while digital will take a 36 per cent slice. But that’s still an entirely less tangible market than the 81 per cent-19 per cent split of 2011, and no doubt sales of Ikea’s finest Benno DVD towers will tumble accordingly.

The pace of the digital advance can be debated by the generals of physical media, but as far as western markets are concerned, growth is coming from only one source, and going in only one direction.

So when Bartley O’Connor, head of PwC Ireland’s technology and media consulting practice, says “talking specifically about ‘digital’ increasingly misses the point” and that “its rising penetration ceases to be a topic for discussion in itself”, he is essentially telling media and entertainment groups to get on with it. This is no time for “stop the future, I want to get off”.

For entertainment and media groups, the strategy is to pinpoint the exact moment when it stops making sense to pour cash into legacy products and starts making sense to adopt a philosophy of managed decline.

At what point will revenue generators turn into retro-niceties? That’s above my pay grade, and most people’s, but it does seem like the length of time between a product’s status as must-have innovation and its destiny as a kitsch shelf-filler in the home accessories corner of Urban Outfitters is shortening.

There’s HMV, last king of the physical entertainment vendors, resorting to the desperate measure of instore download kiosks, yet still trying to make Blu-ray happen.

When Blu-ray dies, few will remember that it once emerged the victor from a VHS vs Betamax-style format war with HD DVD.

That was 2008; this is now. HMV’s total sales, meanwhile, have now dropped below the £1 billion mark for the first time since it floated in 2002.

Some analogue artefacts inspire more fond remembrances than others.

A Facebook meme with a picture of an audio cassette and a biro asks people to share the image if they understand the connection between the two objects. It’s one for the manual-winding generation. Marker-labelled audio cassettes are in fashion, adorning bags, T-shirts and iPhone covers. Video cassettes, always less romantic, don’t enjoy quite the same level of homage. Similarly, when the computer mouse is finally rendered extinct, I doubt kitchen cool-kids Joseph Joseph will be making mouse mat-themed chopping boards, the way they currently do with vinyl.

Still, it’s surprising what comes around – witness the creation of the Geocities-iser, which “can make any web page look like it was designed by a 13-year-old in 1996”. Just for badly animated laughs, of course.

Soon we will look back in bemusement at the concept of a television set (or “media hub” as PwC calls it) that measures less than the new standard of 53 inches and yet somehow can’t be carried about with anything less than two hands and a coronary.

When PwC says that “digital is the new normal” and that companies must “make the necessary changes” to their products, distributions and organisations, it is effectively calling on entertainment and media groups to accelerate their disinvestment from the physical products we know and half-love.

In summary, life moves pretty fast. I look forward to giving my grandchildren a birthday jpeg-equivalent of the IrishTimes.comhome page from the day they were born, then trying to explain there were once these things called news websites and when they were first created you had to go and sit at a special desk to look at them and for many years they were only viewable via what was known as a "screen".

And then I’ll move on to the honours course of the physical media era – explaining the minds that brought us the album hidden track.

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics