Stefan Mileschin

Once touted as the saviour of the content industry, Blu-ray is being killed off by video-on-demand and downloads.

Sony has warned of heavy losses primarily due to its exit from the PC business and because "demand for physical media is contracting faster than anticipated.

A report released earlier this year by Generator Research showed revenue from DVD and Blu-ray sales will likely decrease by 38 percent over the next four years. Online movie revenue is growing 260 per cent from $3.5 billion this year to $12.7 billion in 2018.

Paul Gray, director of TV Electronics & Europe TV Research at market research firm DisplaySearch, told Computer World that people are now used to the instant availability of online media, and "the idea of buying a physical copy seems quaint if you're under 25".

What might finally kill off Blu-Ray is the High Efficiency Video Coding (HEVC) video compression standard, which doubles the amount of data that can currently be streamed while keeping the "high-definition" format. HEVC can support 8K Ultra-High Definition content with resolutions up to 8192x4320.

Blu-ray never did as well as DVD, which dominated the home entertainment world in 2004 with $21.9 billion in sales representing a whopping 96 percent of home entertainment spending.

DVDs still have respectable sales figures, and many consumers see DVD as good enough. Optical media might survive as a form of back-up of personal data because it will end up being more reliable than cloud storage. However, for anything else, it will be toast.

Blu-ray was officially introduced in 2006, backed by Sony and other manufacturers, had a slow take up and indeed only had any success because of its integration with Sony's PlayStation 3.

Last year, about 124 million Blu-ray discs were sold in the U.S., a 4.2 per cent increase over 2012, according to IHS Technology. Even so, because of reduced pricing for the format, revenue only increased 2.6 per cent. DVD sales, which have been plummeting for years, dropped 13.6 per cent last year.

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