The Enduring Appeal of Physical Media

With streaming now commonplace, a new generation of music and movie fans are embracing physical media and turning it from a mass market commodity and into an in-demand product for a niche market.

From music to movies, year-over-year physical media sales have plummeted from their peak in the mid-2000s. As a result, media companies have been rumored to decrease or entirely forgo producing home video titles; retailers have severely slashed or completely removed their once best-selling music selections; and companies have decided to stop making physical media devices like Blu-ray players.

Is physical media dying? Despite the grave prognosis, it would be rather presumptuous to say that it is. Rather, the physical media marketplace is evolving, and consumers are dictating the fate of physical media and its place in our culture.

For the better part of the 20th century, vinyl records made music a tangible experience for home audiences. In the 1970s, pocket-sized cassettes came along and made listening to music a more compact and portable experience. By the late 1980s, the music industry settled upon CDs that offered high-fidelity sound the likes of which listeners had never experienced. The CD’s popularity made vinyl records an antiquated product and made the cassette virtually obsolete.

Sales of CDs hit their peak in the year 2000 with a whopping 92.3% market share for all music formats and generated total revenue of $13.2 billion. When it came to sound quality, convenience, and cost, many felt CDs would be here to stay and dominate the 21st century in much the same way vinyl records did decades prior.

But all this changed in the 2000s when the internet became a standard household utility, and music’s prime listening format changed from a tactile physical product and into a digitized computer file. Music downloads and the advent of subscription-based streaming services caused the CD format to plummet in sales and lose its popularity with consumers. By 2020, CDs made up only 4.0% of the market share and brought in $483.3 million in sales, a staggering 96% decline from its peak.

Consumers have shifted their music listening preferences almost exclusively to some type of digital format, with streaming holding a 70% market share that is only expected to increase in years to come. The accessibility of music downloads and streaming – the ability to play any song by any artist anywhere on-demand – is a convenience no physical format of music can ever mimic.

It’s no wonder that a younger generation used to the expediency of an online world has gravitated towards streaming as their primary music listening format. Surprisingly, this same generation is leading the revival of physical music formats long since declared dead.

When I was in college, I would go to Brea, California’s massive two-story Tower Records, every Friday after class. Hours went by as I browsed the music catalogs, listened to new releases, chatted it up with audiophiles, and gave and received music recommendations.

Despite the loyalty of customers, Tower Records, the inimitable worldwide chain of records stores, permanently closed its doors in 2006 and marked the end of an era for the music industry. For many, the closure of Tower Records symbolized the music industry’s transition away from physical to digital sales. If Tower Records couldn’t make it in the digital age of music, how could any independent record store expect to survive?

Music fans like me were forced to consider how we listened to music. Online music stores like Apple’s iTunes offered a digital catalog of music the likes of which no physical store could ever carry. Every song imaginable was available for purchase without buying the entire album. Apple’s iPod could store thousands of these songs in the literal palm of my hand. Regardless of the convenience, my apprehension towards digital was due to the format’s apparent insincerity.

Being an artist myself, I sympathized with musicians whose artistry was now compromised by the digital format. The many intricate creative choices that went into producing an album – from song order to cover art to accompanying inserts and much more – converged to create a complete work of art that presented a musician’s uncompromised vision to the world.

Digital music stripped the artistry out of an album, deconstructing it entirely, and made it into a sterile digitized file made up of individual MP3 tracks devoid of any relation to each other. It was like buying Mona Lisa’s smile but tossing the rest of the painting away. Digital music represented a form of commercialized vandalism that I did not want to take part in. I stubbornly kept digital music at arm’s length and supported record stores and their physical catalogs of music. Surprisingly, I wasn’t alone in my reverence for the physical music format.

Just one year after the demise of Tower Records, six record store owners got together to create an event that would counter the digital music revolution. Dubbed Record Store Day, the event was created as a love letter to independently owned record stores and the endearing appeal of music’s physical formats.

In the 14 years since its inception, Record Store Day has become an annual worldwide celebration offering rarities and exclusive editions of music, primarily in the vinyl record format. The event has created a burgeoning collectors market in the process. Marc Fayd’Herbe, sales manager of Universal Music, has described Record Store Day as “the single best thing that has ever happened” for record stores.

Since Record Store Day’s creation in 2007, sales of vinyl records have risen consecutively from $22.9 million and a 0.2% market share in 2007 to $619.6 million and a 5.1% market share in 2020. With millennials and Gen Z leading the resurgence, vinyl records outsold CDs in 2020 for the first time since 1986.

The popularity of vinyl records has led major retailers like Target, Best Buy, and Walmart to carry vinyl records in-store and online. Musicians now incorporate vinyl records as a vital component of an album’s release strategy. Vinyl records are once again a part of the zeitgeist thanks to the physical media demands of a younger generation.

Brendan Boyle, owner of Folk Art Records in San Diego, opines, “Probably, if I had to take a guess, [vinyl’s resurgence is due to] the omnipresence of our Internet culture, which is so dominant and so extreme that people are actively seeking alternatives to clear their heads.”

In an interview with CNBC, Josh Friedlander, senior vice president of strategic data analysis of the Recording Industry Association of America, offered a practical explanation of vinyl’s popularity. “In an increasingly digital age, vinyl records can provide a deeper, tactile connection to music that resonates with some of the biggest fans.”

Despite the popularity, the sales and market share of physical music formats still pale in comparison to the widespread appeal of digital music. But it’s music’s physical format that allows individuals the ability to reconnect to the music in more ways than one.

The convenience of the digital age made listeners lose a perceptible connection to music that streaming could never replace. When playing vinyl records, a warm, inviting sound envelops the room. The faint cracks, pops, and slight distortions of sound only add to vinyl’s enchantment. Subtle nuances are heard that would otherwise be missing due to streaming’s technical limitations. Audiophiles old and new tout the fidelity of the sound produced by vinyl records as being as authentic as a live performance.

Taking time to stop, sit, and listen to the nuances of a vinyl record creates a nostalgic feeling of longing for a much simpler time and a richer appreciation for music. More than a hipster trend, the resurgence of vinyl along with the persistence of CDs and the surprising upswing in cassette sales – thanks in part to Cassette Store Day, an annual event started in 2013 and inspired by the success of Record Store Day – allows music to endure in physical formats that had been cast into the graveyard of obsolescence.

Recent years have seen streaming platforms remove artists and their catalogs due to personal controversies or disputes over licensing and compensation. These actions by streamers only deprive fans of musical content and only strengthen the argument in favor of owning some type of physical music media. For some, owning hard copy versions of their favorite albums might be the only remedy against such actions by streamers.

The argument about which musical format has better sound quality is highly debatable. At the end of the day, personal preference is the ultimate decider of which format consumers choose to listen to music. But the mere fact that consumers still have a choice and are not forced to accept digital as the only available format to listen to music is a win in and of itself for lovers of physical media.

The saga of physical media’s place in the music industry isn’t unique. The music industry’s struggle in grappling with the embrace of digital over physical content serves as a prescient parable for a similar dilemma surrounding the fate of movies.

In April of 1998, a small startup named Netflix decided to take advantage of the popularity of a new form of physical media called DVDs by offering a DVD-by-mail subscription service. The convenience and expansive catalog of Netflix’s service became so popular that it killed the video rental store.

In the late 2000s, the popularity of DVDs started to decline, and the movie industry saw a precipitous downturn in physical media sales. Netflix set its sights on a new form of media consumption – internet streaming – and took advantage of the burgeoning market.

The rise of streaming platforms like Netflix, Hulu, and Amazon Prime, along with video-on-demand and digital sales of movies, caused consumers to shift their viewing trends online for the very same reasons they embraced digital music in the 2000s. Streaming platforms have experienced a meteoric 1,231% increase in sales in the past decade, whereas DVD sales have plummeted by 86% since 2008.

The situation for DVDs only worsened when movie theaters closed indefinitely in March of 2020 due to COVID-19. With consumers on home lockdown, digital became the go-to format for home entertainment. The need for streaming was so much that Netflix decided to throttle its streaming speeds to keep up with consumer demand. The streaming marketplace became oversaturated when the streaming wars officially began shortly thereafter. WarnerMedia launched HBO Max in May 2020, YouTube TV announced a price hike in June, NBCUniversal’s Peacock launched in July, and CBS All Access rebranded to Paramount+ in 2021.

The most drastic step was taken by Warner Bros. when they announced they were releasing their entire 2021 theatrical slate day-and-date onto their HBO Max streaming service as well as in theaters that were open for business. The news caught Hollywood off guard. Cinephiles saw this as not only a blow to movie theater chains struggling to emerge from the pandemic but a death knell to physical media. Was the movie industry going the way of the music industry in the mid-2000s by embracing digital and forcing consumers to come along with them?

Viewing movies digitally is not always something that is guaranteed. The entire experience is contingent upon having a reliable, high-speed internet connection to view adequate picture and sound quality. With some streaming platforms offering content in ultra-high definition 4K resolution, that prerequisite becomes even more critical. And just like listening to music, watching movies requires a high level of fidelity that streaming struggles to replicate.

Streaming may be a convenient way to watch movies, but it is not all-encompassing. Many were shocked to learn that Netflix’s DVD-by-mail service is still operational, serving 2.4 million subscribers, a sharp decline from the 14 million in its heyday. Netflix’s DVD-by-mail service returns are still profitable enough for them to continue to invest in physical media.

In 2019, the Elton John biopic Rocketman – which was not available to stream on Netflix – became the five billionth DVD shipped by Netflix. The news was surprising and gave fans of physical media hope that there is still a market for physical media in a world where streaming has become commonplace.

Even when purchasing digital content from these streaming platforms, there is no guarantee that consumers will own the title in perpetuity. A recent court filing saw an Amazon Prime customer sue the platform when it abruptly deleted digital content that she had purchased. Amazon argued that when a user decides to buy content on the platform, they’re really purchasing a limited license that allows them to view the content over an unspecified period of time determined by the streamer.

Audiences have also complained about censorship on streaming platforms. Netflix’s recent censoring of a scene in Back to the Future Part II caused such a fan backlash that the streamer decided to revert the scene to the original. Disney+ has also faced criticism for its contradictory censorship of certain films.

These anecdotes showcase an absence of authenticity about streaming platforms. However, physical movie formats have no limitations and have many key advantages that make it a worthwhile investment for audiences seeking an alternative to streaming. For many cinephiles, physical media offers the only dependable option to view movies in terms of unabridged content, technical quality, and overall viewing experience.

DVDs might be heading towards the way of VHS tapes or the LaserDisc, but what has emerged to take its place is the Blu-ray disc and its higher definition 4K counterpart. Like the fidelity of vinyl records, 4K discs offer what many cinephiles believe to be the true picture and sound quality of a movie, making 4K discs a much sought-after commodity for cinematic purists.

The picture quality of a 4K disc is four times sharper and denser when compared to standard 1080p HD Blu-rays. Streamers like Netflix and Amazon Prime have started to broadcast content in 4K. However, the supposed 4K streaming experience has been measured to be no different than 1080p HD. 

The sound on 4K discs is presented in Dolby Digital and DTS 5.1 surround. When coupled with a quality home theater system, 4K discs offer immersive and dynamic soundtracks, the likes of which streaming cannot properly replicate.

Streaming will always be limited by low bitrates, higher compression, and possible bandwidth caps by internet service providers, hurdles that 4K discs will never have. Despite these advantages, the future of Blu-ray and 4K physical media seems uncertain as Samsung has announced it will no longer make Blu-ray players for the U.S. market. But that hasn’t stopped Blu-rays or 4K discs from being made.

Business is booming amongst niche labels looking to preserve movies for future generations. “Around here we say, ‘Blu-rays are forever,’” states Kino Lorber CEO Richard Lorber. Lorber is right: Blu-rays are forever and have become an in-demand format for cinephiles.

Recent years have seen a rise in numerous boutique labels catering to the physical media demands of movie lovers. Bespoke labels such as Lorber’s Kino Lorber, Arrow Video, Blue Underground, Shout! Factory, Vinegar Syndrome, and the long-standing Criterion Collection, to name a few, offer definitive Blu-ray and 4K editions of vintage and contemporary films, arthouse and genre fare, and restorations of classics long feared lost.

These impeccably produced discs come packed with a bevy of special features and memorabilia, a virtual film-school-on-a-disc that whet every cinephile’s appetite and create an alluring relationship with audiences. More than just entertainment, these discs are pieces of cinematic history. “I would be a fool to claim that it’s a growth business,” says Lorber. “But for certain types of collectible films of enduring value, people really want to own them for so many reasons.”

Just like how record stores spurred the resurgence of physical music formats like vinyl records, boutique movie labels will keep Blu-ray and 4K discs alive for years to come. And just like Netflix’s DVD-by-mail service, movies will continue to exist in physical formats to serve an audience seeking quality of content over the convenience of content.

Quentin Tarantino, the cinematic auteur and filmmaking icon whose works have defined an entire generation of movies, cites his time working as a video clerk at Los Angeles’ Video Archives as the most formative experience of his life.

Thanks to the advent of the groundbreaking VCR, video rental stores became a booming business in the 1980s and exploited the popularity of VHS tapes. So did Tarantino. From Monday to Friday, Tarantino would work a complete shift during the day, close the store in the evening, and spend the entire night watching several movies at the store. “When people ask me if I went to film school, I tell them, ‘No, I went to films.’”

With a vast catalog of titles available at Video Archives, physical media allowed Tarantino to receive the film school education he couldn’t afford. There is no telling where Tarantino’s life would have taken him if it wasn’t for the accessibility, inspiration, and knowledge that physical media provided him. This is the power of physical media.

Long before society became an offshoot of the internet, hard copy versions of our favorite media evolved at a technologically breakneck speed until they converged into the digital sphere. Digital media’s appeal is entirely dependent upon its convenience and cross-platform use. Despite this ease, a younger generation is spurring the rebirth of physical media by discovering the nuances of a format that digital can never correctly reproduce.

Physical media’s place in our culture is evolving from a ubiquitous mass-market ancillary stream and into an in-demand product for a niche market. The success of physical media’s evolution is having a cultural impact on the way music and movies are consumed.

Physical media’s cross-generational appeal serves as an ode to its timelessness and offers consumers a way to connect to their favorite music and movies through tangible means. The sales figures for physical media might not reach the heights they once did, but the demand will still be there no matter how small. And it will be due to the limitations of digital, the rise of specialized boutique labels, and consumers’ fondness for a tactual experience that will make physical media evolve into the next phase of its existence to stave off its predicted extinction.