International Home Video Slumps, Despite 4x BD Growth

Media analysis firm Screen Digest has published a rather gloomy report on the global video business in 2008. International revenue (that is, global revenue excluding North America) was $26.4 billion, of which sales accounted for $18.1 billion, 4.7% down from 2007. International BD sales increased fourfold, for $482 million.

Of the top 10 international markets (Japan, UK, Germany, France, Australia, Italy, Spain, Brazil, Netherlands and Sweden), all but one (Australia) had negative growth in video spending. The biggest drops were in download paradises Italy and Spain, which lost about 15% each. On the other hand, China, India and Russia experienced double-digit growth in consumer spend in 2008.

Physical rental also declined because of ever-cheaper disc sales, piracy, downloading and legal and illegal temporary ownership. 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.

International BD sales in 2008 added $482 million to the coffers, which is a "four-fold increase" over 2007. While strong, these sales "barely made a dent in the missing revenue." The 2006-2007 format war prevented Blu-ray from deploying the strong unified marketing that DVD had ten years before. Other obstacles cited are the worldwide recession and the availability of legal and illegal downloaded content.

Helen Davis Jayalath, Senior Analyst at Screen Digest, said: "We expect Blu-ray to account for 6.9% of international video spending this year – assuming there is strong promotional activity. However, despite consumers' interest in the high definition format and demand for packaged media, the current challenging economic climate means that we don't expect BD to be driving even minimal sector growth until 2010."