I really hate it when people are hailing video streaming as if it’s the second coming of Christ. While idea is novel and it may very well be the future of video, it is still extremely far far away from being able to replace Blu-ray Disc’s 20+ Mbps video with lossless audio. Either those people never actually experience video streaming in a real-life situation or they’re trying to lobby for more advertising money from electronics manufacturers. Here are the reasons video streaming is not going to replace packaged media… at least not for the next couple of years.

The picture and audio quality is just not there. For this test I invited five other people to sit in my home theatre and watch a clip from AppleTV (720p, Dolby Digital 5.1 sound), a clip from Netflix (1080p, Dolby Digital 5.1) and the same clip from Blu-ray Disc (1080p, Dolby TrueHD 5.1). None of these five people is a videophile. One of them doesn’t even have an HDTV at his house. Even with their “normal”, non-hobbyist eyes the moaned and groaned when I moved from Blu-ray to Netflix or AppleTV. The quality difference is so huge even they start questioning why there are so many articles claiming the death of packaged media.

I’m talking about both sustained download speed and monthly download capping by internet service providers. I’m one of the few lucky ones who can maintain a 7 Mbps download speed at most times (sometimes it goes down to 5 Mpbs and sometimes it goes up to 10 Mbps). However, even at 7 Mbps, it’s nothing compared to the (now minimum of) 20 Mbps of Blu-ray Disc. Using a similar MPEG-4 based video codecs, a third of the bandwidth is a third of the quality. It may not be perceived nearly as bad as that, but the decline in quality is substantial. Even moreso if you can only maintain a 5 Mbps sustainted transfer speed or lower… which most of the population is experiencing.

Couple that with the (usually) only 60 GB monthly download cap imposed by our beloved internet service providers, it means for the best quality available for streaming, you can only “rent” about 6 to 8 movies a month which in the case of Netflix means $8 for the monthly fee + $70 for the internet monthly fee. $78? You can rent FOURTEEN Blu-ray Disc at that price. More movies with better quality and better sound. So how streaming is the future when it’s a lot more expensive than renting something that is better plus you don’t need to worry about the movie being paused in the middle of showing due to download speed limitation that occasionally plagued our internet service providers?

Even if we can magically overcome the bandwidth, video and quality issues, there is another major hurdle that I don’t think we can overcome anytime soon, not even in the next 5 years or so. It’s the evil entity called Canadian Radio and Television Committee and forced bilingualism. Even with Blu-ray Disc, there are so many BD-Live content that are not available for Canadian consumption just because it’s not available in both languages. Being only 10% of the purchasing force of the US market, it is not of any financial reason for the studios to have everything in both languages. Furthermore, our beloved CRTC forces a certain percentage of Canadian content to be available for any operation to be able to exist in Canada. The truth of the matter is that Canadian content don’t bring enough revenue because they tend to suck. Why are they horrible? It’s due to the overprotective nature of CRTC. Being babied and coddled after all these times, Canadian production quality stagnates. Why be better if mediocrity will be accepted anyway (albeit due to the protection of CRTC). This is the reason there is no Blockbuster on Demand, there is no Vudu, there is not even the same amount of selection between Netflix / AppleTV / Qriocity US and Canada.

Until CRTC can back off with the overprotection of Canadian contents, there will be more choices in renting or buying Blu-ray Disc content than streaming.

So what now?
Out of my personal curiosity I re-compressed my 27 Mbps Blu-ray with Dolby TrueHD sound to various bitrates AVCHD and try to find the point that is indistinguishable for my five friends and neighbours between the packaged media and streaming-like content. Each re-compression is done in dual-pass scheme creating the smallest with the best picture quality possible given a certain bandwidth. In the end, we all came up with the version that is indistinguishable for the five of them and virtually indistinguishable for me. We ended up needing 640 kbps Dolby Digital Plus sound (not the 383 kbps Dolby Digital in regular video streaming) and about 14 Mbps AVCHD streaming file making the total streaming bandwidth required to be around 15 Mbps, more than double than the best streaming currently available.

With the current infrastructure, a sustained 15 Mbps for at least 90 minutes is impossible for more than 90% of the population of Canada. Furthermore, with the 60 GB monthly bandwidth cap, that means one can only rent no more than four movies. All, in all, it’s cheaper to buy (not even rent) the original Blu-ray Disc rather than stream the content. Furthermore, if and when these limitation have been lifted, I feel that they can only be resolved in about four to five years from now… which if you believe what NHK researcher told me, 2016 will be the start of 4K HDTV (Ultra High Definition TV) broadcast which require four times the bandwidth of the current Blu-ray Disc (100 Mbps vs 25 Mbps) so the streaming technology will be once again playing catch-up with the video technology. On the other hand, you can also believe the Mayan calendar that the world will end on December 21, 2012.

Either way, streaming can only complement packaged media but I doubt it will soon (if ever) will replace packaged-media technology.