Japanese outlet The Mainichi has reported that Sony plans to cut around 250 jobs in its recordable media business. The decision is a hard hit to one of the company's key physical media divisions and in particular to the Blu-ray format, which Sony developed and has remained loyal to since it unveiled the first disc prototypes in 2000.
Layoffs galore. The cut of 250 jobs increases the tally of the many of layoffs in the technology and video game sectors. In 2023, Microsoft announced that it would lay off 10,000 employees worldwide. Another 1,900 layoffs followed in early 2024 at Xbox. Sony followed suit, cutting 900 employees, followed by Embracer. Meanwhile, EA laid off 6% of its workforce and Take-Two laid off 5%.
The layoffs at Sony. According to The Mainichi, the 250 people affected by the layoffs represent 37% of the workforce at Sony’s recordable media business in northeastern Japan. As the media outlet reports, “the planned job cuts come amid a decline in demand for traditional storage formats such as Blu-ray discs, with streaming services now the norm." This appears to suggest that the layoffs are more likely to affect Sony's film and show division, not its video games unit.
The Mainichi also cites anonymous sources saying that Sony will “gradually cease production of optical disc storage media products, including Blu-ray discs.”
The nuance. President of Physical Media, an X account specialized in physical media formats and news, added more details to the news. According to the account, the Sony decision only affects Japanese factories, so it’s a bit complicated to extrapolate to an international scale. Moreover, the X account states that these factories specialize in recordable material (CD-R, DVD-R, BD-R), so it shouldn’t affect discs produced with the commercial editions of movies. What’s clear, however, is that these layoffs are symptomatic of an undeniable decline in physical formats.
The decline of physical media. The data we’ve been working with for years suggests a decrease in sales of physical formats that seem to be coming to an inevitable end. For example, DVD sales fell by more than 86% in the U.S. in the 13-year period between 2006 and 2019. The peak of the format’s sales was in 2005, with Blu-rays appearing in 2006. Although you might think that the introduction of the new format has something to do with the decline of the DVD, studies point to other reasons: The economic recession that affected sales, the birth and explosion of digital formats, and the introduction of the first streaming platforms, which undoubtedly have a lot to do with the continued decline of physical formats.
Beaten, but not dead. In 2024, however, DVDs still represent half of all physical format sales. This is bad news for DVDs, which are on track to eclipse VHS as the longest-lived physical format in history, and it’s sad news for everyone else, too. Blu-ray has failed to provide an alternative, and sales of all formats are declining. In other words, in February 2023, 294,044 movies were released on DVD, while only 32,289 on Blu-ray and 1,272 on 4K. I insist that it's unwelcome news for everyone because the public has found a new alternative in streaming, not in a new physical format.
Streaming, the main culprit. The data goes on and on (Samsung, for example, stopped making 4K UHD Blu-ray players in 2019), but one of the most apparent and agreed-upon reasons for this decline is streaming. A 2023 study showed that 67% of U.S. households preferred to subscribe to streaming services rather than buy physical media. The same research spoke of global subscriptions to streaming services exceeding 1 billion this year, a significant increase from 500 million in 2018. This competitor has clearly become the favorite among audiences when it comes to consuming audiovisual content.
Image | Diego Correa
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