Global stagnation to continue in home video entertainment
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Global stagnation to continue in home video entertainment

Hmmm. Could Steve Jobs be right about the future of movies, as well as music, being digital and online? Maybe. According to the latest research from Strategy Analytics, the global home video market is poised to see further declines in the years ahead.

Global revenue from sales of DVDs and Blu-ray declined more than 4% in 2009, to US$35.7 billion, and is set for another 2% drop in 2010, according to the research group. At the same time digital distribution channels such as iTunes for home video entertainment aren’t developing fast enough to offset the decline in packaged media formats.

The total packaged media market, including both retail and rental of DVDs and Blu-ray, is projected to decline 3% in 2010, to $53.3 billion and by 12.6%, to $48.1 billion by 2013.

"The future of the home entertainment market is within digital distribution of home video," says Martin Olausson, director of Digital Media Research at Strategy Analytics. "We believe the Hollywood studios now need to increase their focus and resource allocation to digital distribution as fast as possible, or face the consequences of a stagnating market in the coming years."

"This stagnation in the home video market is principally supply-side driven," adds Kevin Nolan, vice president of User Experience Research at Strategy Analytics. "Our advanced user experience research on early adopters of digital media services, undertaken by our Digital Home Observatory service, suggests that early adopters are almost universally consuming more content now than they did before they started using digital media services."

On the other hand, a recent HP survey in the UK indicated there was plenty of life left in CDs, DVDs and Blu-ray.

HP’s survey found that 86% of the population access some form of digital media, the survey revealed consumers attach very little monetary or emotional value to the digital content they own. For example, 68% of consumers still prefer photographs to be physical rather than digital. Sixty-four percent prefer CDs over MP3s and downloads when purchasing music. And 75% preferred DVDs when it came to films, while a massive 95% still prefer reading books traditionally.

I personally think that digital media and physical media will exist for a loooong time to come. But when it comes to statistics and surveys, as the old saying goes, "99% of all statistics are made up."

-- Dennis Sellers

 

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