Sluggish Economy Undermines French Home Entertainment Biz16 May, 2014 By: Erik Gruenwedel
Home video sales dropped 17% to less than €1 billion in 2013
French consumers spent less on home entertainment in 2013, including buying 17% fewer movie discs, 5% less at the box office, and 6% less on transactional VOD — the latter’s first annual decline, according to new data from Futuresource Consulting.
The London-based research firm attributed the decline in large part to the French economy, which is languishing compared to neighbors Germany and the United Kingdom — each posting 7% and 4% growth, respectively.
“Consumer spend on video in France, which includes subscription pay-TV, box office, packaged home video, transactional VOD and online video, declined 1%, to €7.6 billion, [and] is expected to remain flat in 2014,” Joanna Wright, senior market analyst at Futuresource, said in a statement.
Despite weak consumer confidence, France had a strong growth year in Pay-TV, adding 700,000 homes to reach 20.4 million; and driven primarily by high-speed Internet service.
“France remains one of the largest Pay-TV markets globally and accounts for nearly 70% of overall video spend in France,” Wright said.
Meanwhile, total digital video revenue grew 8% to €233 million, and is expected to improve due to pending service launches from French telecom Orange, Netflix and national retailer Carrefour.
Subscription streaming revenue jumped 92% to €45m, but remains a relatively small market segment, accounting for just 19% of digital video spend. Netflix is expected to launch service in France and Germany in the second half of the year.
“SVOD has been slow to take off in France, partly due to the strength of existing pay-TV subscription services. Netflix could be the catalyst for change to help raise awareness and stimulate interest,” Wright said.
Digital content sales and Internet-based VOD grew a combined 5% to €65 million. The segment is largely driven by iTunes, which dominates both categories, and while Google, Xbox and Sony are also present, they have yet register a significant impact, according to Futuresource.
Digital sales are projected to grow 11% to €72 million this year as pricing initiatives, new EST services from Orange, Carrefour and an improving economy help drive the market.
Total digital video spending is expected to increase by an average of 22% annually from 2014 to reach €0.6 billion by 2018.