London, UK (June 23, 2009)–According to the latest report from Screen Digest, the global video business lost more than $2.6 billion in 2008 due to a combination of a fall in both DVD purchase and rentals by consumers.
The figure equates to a downturn of 4.8 percent globally. While the decline in North American DVD sales is well documented, the decline in international markets (global excluding North America) has received less coverage.
According to the report, internationally last year consumers spent $26.4 billion on video software, with two-thirds of that figure ($18.1 billion) spent on buying DVD discs. The overall figure represents a 3.6 percent drop on 2007 spend and a 4.7 percent drop on disc sales alone. The sales figures are in line with the overall trend, which saw consumer spending plateau between 2004 and 2007, and the North American market starting to decline in 2007, which signaled the start of a global downward trend.
Screen Digest observes that the high-definition Blu-ray format was heralded by the industry as the answer to the decline of DVD. However the format war with Toshiba’s HD DVD meant that the strong unified marketing that had worked so successfully for DVDs launch a decade earlier was not replicated. This, coupled with a worldwide recession in consumer spending and the easy availability of video via other means such as downloading, pirate, legal and illegal temporary ownership, ensured that despite strong sales of BD in 2008 of $482 million, they barely made a dent in the missing revenue.
As mass market rental chains adopt ever more aggressive pricing strategies to keep customers, online rental services such as LoveFilm International in Europe and Quickflix in Australia have helped ease the decline of physical rental, however online rental is not effective in all markets.
Three countries experienced double-digit growth in consumer spending in 2008: China, India and Russia. At present, their combined spend accounts for only four percent of the international total ($979 million), therefore placing the combined countries just ahead of Italy in international rankings. Although this is small, the markets have attracted the eye of the Hollywood studios as a result of their performance, states the report.