UK video sales down but signs good, says BVA

Warner Bros.’ smash hit ‘Harry Potter and the Deathly Hallows Part 2’ augers well for Q4 video

By Ray Bennett

Total video entertainment sales across all platforms were down year-on-year by 5.7% to £1.012 billion with an 18% increase in digital video transactions in the first half of 2011, according to figures released  by the British Video Association.

The drop in sales compared favourable with record successive quarterly falls in spend of 5.9% and 1.4% on recreation and culture reported by Visa and the 7.4% drop in electrical household appliances record in households goods stores by Haver Analytics, the BVA said.

BVA Director General Lavinia Carey said, “The first half has been a bit of roller-coaster with wallets and purses squeezed but despite that people still found more than a billion pounds to spend on video entertainment, the vast majority on physical formats. Digital is growing and has huge potential with the growth of internet-connected devices such as smart phones and tablets now an accepted norm for video viewing.”

The BVA said that an 18% increase in spend on digital video transactions is an indication of how the video entertainment business has evolved in the UK. “With 44 individual services from which content can be downloaded or streamed to connected devices across a range of internet and commercial TV-based platforms, consumers now have more choice than ever in the way they access video entertainment,” the industry body said.

In the half-year figures, physical discs remained the most popular way to watch video and accounted for 96.5% of all sales by value in 2010. Disc sales in the first half of 2011 were down 8.1%, as reported by the Official Chart Company, but physical sales of music albums and console games also saw values fall, by 10.4% and 13% respectively, according to Kantar’s Worldpanel.

The BVA noted that IHS Screen Digest predicts that discs will still account for 88% of all video purchases by 2015. “Consumers will undoubtedly mix their video viewing habits more in the future, buying different formats for different uses, allowing each to thrive alongside each other,” it said.

The BVA said it anticipates better retail sales performance in the second half of the year because Christmas gifting is such an important feature of Q4 and represents 35% of total annual sales in 2010. “The 3% rise in the year-to-date UK box-office performance will feed into the video entertainment market in the second half of 2011. Big opening weekends for “Transformers: Dark Of The Moon”, “Pirates Of The Caribbean: On Stranger Tides” and record-breaking “Harry Potter and the Deathly Hallows Part 2” all provide very encouraging signs for video sales in the run up to Christmas,” it said.

Carey said, “We’ve had notable successes in the first half and some fantastic releases in all genres coming up that will be hugely popular in the second half of the year, particularly in the run up to Christmas – always the most important sales period because almost 60% of consumers say that Blu-ray Discs and DVDs make great gifts, according to Kantar’s Worldpanel”.

She noted that FutureSource Consulting found in 2010 that 15% of the 50 million mobile phone owners in the UK used them to view video content. For non-iPhone smart phones it was 24%, rising to 67% of iPad owners. “But we still see Blu-ray and DVD dominating the market for this year and many more to come,” she said.

BVA Vice Chairman Paul Dempsey, who runs BBC Worldwide’s Consumer Products division, which comprises mainly video from 2entertain, noted that his division posted record profits of £48.9 million for 2010-11.

He said, “DVD remains an attractive business. We’ve been selling TV on video since the early ’80s and our business is at record levels of profitability since then.”

He said the performance of 2entertain was down to steady sales in physical and a burgeoning digital business: “In digital, we’re iTunes’ biggest TV partner in the UK and we’ve sold around 22 million downloads with them since launch. We achieved £9 million in sales from digital downloads in the last year and I can only see that growing exponentially.”

But he said that physical remains a fundamental part of his firm’s business – and it will for years to come. “We sell around 50 DVDs every minute of every day across the world, which is hard to reconcile with some of the downbeat figures we often see quoted. For me, the DVD box-set has some years left in it yet. Looking ahead to this Christmas, I’d say our line-up is, if anything, bigger than in 2010.”

This story appeared in Cue Entertainment.

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