Downloads to Replace Traditional Media Within 10 Years?

Gameindustry.biz has posted an article about EA’s predictions that there will be a shift from traditional optical media to downloadable games and movies within 10 years because of the constant increase in Hard Drive size and internet connection speed and the cost-effectiveness of a download service over the world-wide shipping of hard copies.

EA’s European VP of sales, Dr. Jens Uwe Intat, has given the clearest signal yet of the firm’s commitment to digital distribution – stating that within the next ten years, “all entertainment media will be downloaded to a device.”

Speaking at the firm’s European HQ in Chertsey, Dr. Intat told GamesIndustry.biz that ten years from now “CDs, DVDs and boxed games will be as antiquated as cassette tapes and vinyl records.”

He gave the examples of Apple’s iTunes, the massive ring-tone business, and the growing trade in digital books as clear indicators of where media distribution technology is headed, and predicted that new business models would emerge to complement the existing up-front payment model as digital distribution became more popular.

However, Dr. Intat was adamant that EA and other videogame publishers would not allow the situation which has arisen in the music industry – where Apple’s dominance of digital distribution with the iTunes Music Store has allowed them to set prices independently of the wishes of major music publishers – to be repeated here.

“I think the music industry has actually let iTunes happen,” he said. “The music industry had been working on a model like that for years – they just couldn’t agree on a standard, on how to share the cake. They were fighting all the time, instead of going for it, and then a new company actually came into that space, started with a technology model – and then dictated the software, and how the content would be distributed.”

“Right now, iTunes is pretty much a monopoly,” he continued. “They have, I don’t know, around 80 to 90 per cent market share. We still have three large players in the console business, plus we have the PC as a fourth hardware device, not to mention the handhelds. This is a much more fragmented industry – we don’t have one company that has a monopoly – and we as a total industry, software publishers and hardware manufacturers, are already sitting together and working on business models. We’re actually trying to make the cake as big as possible, rather than fighting over the crumbs.”

While Dr. Intat’s comments are the clearest indication yet of EA’s belief in a future where all videogame content is downloaded rather being sold in physical form, he was guarded in his response to a query about what this meant for traditional retailers.

“Firstly, traditional retailers are also entering the online space,” he said. “The Wal-Marts of the world are competing with the Amazons of the world in traditional products – and they will do so in the online space.”

“Secondly, there will always be – well, always is a little too far-reaching maybe, but for a very long time there will still be distribution of physical products. We should not underestimate the value of the reach that we do have today with our products – the impulse purchases that people are making, and that there are a huge amount of consumers out there who still want to buy physical products. The gift market also, the parents and grandmothers who still want to purchase presents for kids, and will still continue purchasing products in physical form,” he concluded.

Gameindustry.biz has posted an article about EA’s predictions that there will be a shift from traditional optical media to downloadable games and movies within 10 years because of the constant increase in Hard Drive size and internet connection speed and the cost-effectiveness of a download service over the world-wide shipping of hard copies.

EA’s European VP of sales, Dr. Jens Uwe Intat, has given the clearest signal yet of the firm’s commitment to digital distribution – stating that within the next ten years, “all entertainment media will be downloaded to a device.”

Speaking at the firm’s European HQ in Chertsey, Dr. Intat told GamesIndustry.biz that ten years from now “CDs, DVDs and boxed games will be as antiquated as cassette tapes and vinyl records.”

He gave the examples of Apple’s iTunes, the massive ring-tone business, and the growing trade in digital books as clear indicators of where media distribution technology is headed, and predicted that new business models would emerge to complement the existing up-front payment model as digital distribution became more popular.

However, Dr. Intat was adamant that EA and other videogame publishers would not allow the situation which has arisen in the music industry – where Apple’s dominance of digital distribution with the iTunes Music Store has allowed them to set prices independently of the wishes of major music publishers – to be repeated here.

“I think the music industry has actually let iTunes happen,” he said. “The music industry had been working on a model like that for years – they just couldn’t agree on a standard, on how to share the cake. They were fighting all the time, instead of going for it, and then a new company actually came into that space, started with a technology model – and then dictated the software, and how the content would be distributed.”

“Right now, iTunes is pretty much a monopoly,” he continued. “They have, I don’t know, around 80 to 90 per cent market share. We still have three large players in the console business, plus we have the PC as a fourth hardware device, not to mention the handhelds. This is a much more fragmented industry – we don’t have one company that has a monopoly – and we as a total industry, software publishers and hardware manufacturers, are already sitting together and working on business models. We’re actually trying to make the cake as big as possible, rather than fighting over the crumbs.”

While Dr. Intat’s comments are the clearest indication yet of EA’s belief in a future where all videogame content is downloaded rather being sold in physical form, he was guarded in his response to a query about what this meant for traditional retailers.

“Firstly, traditional retailers are also entering the online space,” he said. “The Wal-Marts of the world are competing with the Amazons of the world in traditional products – and they will do so in the online space.”

“Secondly, there will always be – well, always is a little too far-reaching maybe, but for a very long time there will still be distribution of physical products. We should not underestimate the value of the reach that we do have today with our products – the impulse purchases that people are making, and that there are a huge amount of consumers out there who still want to buy physical products. The gift market also, the parents and grandmothers who still want to purchase presents for kids, and will still continue purchasing products in physical form,” he concluded.