VOD sales not compensating for DVD’s demise
Joseph O'Halloran | 04-12-2013
Even though the format is offering more high definition and 3D content, DVD is on an inexorable decline, says research from IDATE.
The analyst calculates that even though DVD and Blu-ray sales and rentals were still generating around €11.6 billion in 2005-2006 in Europe, by 2012 the sector’s revenue had dropped to €7.6 billion. This crumbling income is due, said IDATE,
to the combination of a swift decline in the number of physical sales and rentals, and a drop in DVD/Blu-ray sales and rental prices. “This could all seem somewhat paradoxical at a time when we keep hearing that content is king,” commented IDATE’S head of TV & digital content practice Florence Le Borgne.
“Even though content has never been so front and centre, the public’s love affair with discs seems to be over. Plus there have never been so many alternatives to choose from,” the analyst added.
“Between the growing selection of films and series on linear free and pay-TV channels, the ability to find these same programmes on the channels’ catch-up services, along with the proliferation of VOD streaming and rental offers for single programmes on managed networks and online, and the development of subscription VOD services, not to mention the various means of watching content illegally, movies and TV series have never been so easy to find on our screens, big and small, fixed and mobile.”
Many have assumed that DVD’s decline would be compensated by an increase in revenues from a growing on-demand sector. IDATE revealed that as global sales for physical video products dropped €2.8 billion between 2011 and 2012, revenue from VOD per unit sales grew by an additional €1 billion, which means that the video sales and rental market as a whole lost 5.7% during that time.
“The outlook for the DVD industry is not a sunny one, and the next few years will see a continued decline in both revenue and the number of units sold,” Le Borgne concluded.
“While subscription VOD is expected to continue to grow, IDATE does not believe it will fully offset the demise of physical sales over the next five years, unless the physical and electronic video markets were to merge, [compared with] the UltraViolet and Digital Copy Plus initiatives, which could rekindle users’ interest in DVDs.”