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Disc, Digital Drive British Film and TV Industry Revenue

6 Jul, 2012 By: Erik Gruenwedel

Sales of movies and TV shows on DVD, Blu-ray Disc and digital formats are the biggest single revenue source for the production of film and television drama in the United Kingdom, according to a new report commissioned by the British Video Association.

Video (physical and digital) represented 47% of total 2011 feature films revenue, which topped 3.1 billion pounds ($4.8 billion), compared with 29% from television and 24% from theatrical box office. Video accounted for 34% of 1.9 billion pounds ($2.9 billion) revenue from TV shows compared to 66% from traditional broadcast spot ads.

Meanwhile, video accounted for 19% of 1.5 billion ($2.3 billion) children’s content revenue, compared with 70% from traditional TV and 11% from theatrical.

Specifically, the report created by Oxford Economics said disc sellthrough represented nearly 76% ($2.6 billion) of U.K. video revenue, compared with $426 million from physical rental. Transactional video-on-demand rental generated $294 million, while digital sales reached $149 million.

“The audiovisual industry is experiencing rapid and dynamic change as a result of digital technologies that create huge opportunities and challenges to a complex creative sector, which is shown in our report to be heavily reliant on video entertainment to generate returns on investment in film and television production,” Lavina Carey, director general of British Video Association, said in a statement. “It is vital, therefore, that additional uncertainty is not introduced into the sector by simplistic copyright policy changes or hesitancy in enforcing copyright law while our industry evolves, offering more innovative digital services alongside the ever-popular DVD and Blu-ray Disc while maintaining the quality in video entertainment that is so widely enjoyed by British audiences.”

Despite ongoing media fascination with subscription VOD services such as Netflix, Hulu Plus and Amazon Prime, discs continue to drive revenue and margin proportionally higher than TV and theatrical.

For example, the report cited BAFTA-winning documentary Senna, about the life and death of Formula One racing champion Ayrton Senna, which sold 750,000 discs and generated 62% of revenue from video. Another 32% of the doc’s revenue came from TV (broadcast and cable/satellite) and 6% from box office.

The identical trend applied to Universal Pictures’ theatrical release, Paul, which generated 60% of U.K. revenue from video, 23% from TV and 17% from box office.

Other titles included in the study: Sherlock Holmes (Warner) generated 47% of U.K. revenue from video, compared with 57% from combined theatrical and TV; action film Shank (Revolver) generated 77% from video, 15% from box office and 8% from TV, and Lionsgate’s Screwed, which accounted 95% of its revenue from video, 4% from TV sales and 1% from box office.

“As the BVA’s report shows, video continues to be a critical part of the film industry’s ecosystem and a significant driver of revenue,” Eddie Cunningham, president of Universal Pictures International Entertainment, said in a statement, “Working Title’s Paul and Senna are two great examples of British filmmaking at its best, and the revenue generated from video — more than 60% coming from home entertainment on these titles — is hugely important in helping British producers like Working Title re-invest back into production and continue to create great films.”

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