John Marmaduke talking to CNET’s Greg Sandoval:

DVDs are still a $12 or $14 billion business. What people from the tech world often do is confuse themselves with the entire marketplace.

No, what people from the “tech world” do is give insight based on earlier adoption of new technology and forecast how things are going to play out.

I’ve noted in all my posts that this greedy “30 day window” ploy was likely to cause a temporary bump in DVD sales. But the keyword is “temporary”. Just watch. They will start falling again. And sooner than Hastings would like.

Creating demand based on false scarcity is not a sustainable business model.

And the real key here is that disruption is going to keep coming. At first it was Netflix’s mail model. Then it was Redbox $0.99 model. Then it was Netflix’s streaming model. And Apple, Amazon, etc, doing rentals over the web. There will be more of this in the years to come, not less.

And the fundamental point is that most movies simply are not worth owning. Preventing people from renting them will eventually either lead to more piracy or to them simply not watching the content and looking elsewhere for other content (like the web).

The studios and retail chains do not understand this. They really seem to think they can keep counting on their cash cow DVD sales indefinitely. It’s laughable.

Every technology is replaced by a new one. The problem they have is that the one replacing DVD isn’t as profitable for them because it leads to a different type of consumption. Or rather, it makes possible a different type of consumption that should have always been in play in the first place.

The DVD is dead, they just don’t realize it yet. In five years, they will look like what cassette tapes look like today when you walk into a store and see them.

Greedy ploys are nothing but a temporary stopgap. And the fact that the studios and retail giants don’t seem to understand that means they’re going to be burned very badly.