What is this “DVD” you speak of?

Two interesting “media delivery” related developments this week coming out of the sleepy little town of Palo Alto:

During their latest earnings report, Netflix (NFLX) announced they now serve most of their content via streaming, vs. DVD mailers.  More and more people are adopting the “watch instantly” approach, via Netflix applications that run on their computers, their game consoles, or even on the TV itself.  The last 2 years have seen a huge shift away from DVD and Blu-Ray.  Streaming used to be for the minority of Netflix subscribers, now it’s the majority.

Just down the road at Apple (AAPL), Steve Jobs unveiled the latest and greatest in the Mac lineup, the revamped MacBook Air.  The original Air didn’t have an internal optical drive, but instead made it an optional external peripheral.  You still needed it if you wanted to reinstall the operating system, etc. but for the most part you didn’t HAVE to have the accessory and could live optical-drive-free.  But now, instead of a recovery CD / DVD (like most computers ship with) the Air comes with a recovery USB drive instead.  Brilliant.  Now you don’t really need an optical drive at all.

The tipping point has been reached, and early adopters are hastening the changeover.  How long before we start seeing large-scale abandonment of plastic discs as the way we buy movies and software?

Posted by Brian

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