Cloud Media vs Physical Media: Are Consumers Ready?

The cloud’s ascension to becoming a staple of the modern Web experience has been fast to say the least. Today users are buying their music directly from cloud-based stores — such as Amazon and iTunes — and CDs are quickly becoming an obsolete medium. Movies are being streamed on Netflix, Amazon, iTunes, and YouTube at an ever-increasing clip, while DVD sales slowly diminish, and the Kindle and iPad are quickly becoming printed-book killers. Earlier this week, we discussed the cloud movement within video games, and decreed that the physical video game will soon be a thing of the past.

What does this all mean? How much longer are businesses willing to continue to produce physical products that aren’t actually necessary? Today we will discuss whether or not it’s fruitful for businesses to alienate consumers who aren’t “in the cloud” just yet.

A statistic that should shock most people reading this article from their internet connection, is that only 78.6% of people in North America are internet users. Last November, Gizmodo published an article that stated that 3.5 million Americans are still using dial-up internet. These are very large demographics, and not ones to be ignored.

Any Internet-based media not only requires an internet connection, but more often than not, it requires broadband service. This means that any company that is currently making their bottom line by producing physical media, would be potentially eliminating a large percentage of customers by going cloud-only. Until these statistics narrow a bit, no business should make the leap to cloud-only media just yet.

However, this is different for start-up media businesses. For companies like Apple, who never sold physical media, a virtual store is a great option. They don’t have any existing bottom line to risk, so the absence of a physical location creates a purely profitable marketplace. This is the same for the solely Internet-based game company, OnLive. The market for cloud-only consumption is there, and if a company is getting their feet wet in the personal-media sales game: cloud-only service is a great way to keep overhead low.

In closing, although the cloud is clearly the future of media, I don’t think that the world is ready to eliminate physical media options just yet, because the demand for them is still too high. There’s also many people who don’t like change, and would rather do things the way they always have. The Internet’s dominance is evident, and years from now, we’ll be seeing CDs and DVDs on display at history museums. For now though, it’s beneficial to keep familiar options available.