French Disc Replicator QOL Enters Form of Bankruptcy5 Mar, 2014 By: Erik Gruenwedel
Company shuttered its Belgian subsidiary in 2011 due to declining packaged-media sales
French disc replicator QOL has entered into a six-month administration period — a form of bankruptcy — citing significant declines of disc sales in the country and Europe.
Based in Vernouillet, QOL is now under the jurisdiction of a commercial court in Chartes as it seeks additional funding to maintain operations, according to a company disclosure.
QOL represented about 40% of the French Blu-ray Disc replication market, with operations spanning England, France, Germany and Northern Europe. In 2009, the company acquired Belgian disc manufacturer Vogue Trading Video, a subsidiary of the Roularta Media Group. It shuttered those operations in 2011.
The company’s presence in Europe is extensive and the implications, should QOL cease trading altogether, would be felt beyond the borders of France, particularly among the broad range of independent content owners the company serves, according to IHS Technology.
In a report, IHS data indicates the number of DVD units shipped by distributors in France declined by 15% in 2013, while Blu-ray units dropped by 7.2%, marking the first year of decline in consumer spending for Blu-ray in France.
IHS said spending on retail packaged media fell nearly 17% in Europe in 2013. With the demand for packaged media from retailers and video stores continuing to subside, the drop in the average DVD and Blu-ray price at the consumer level to €13.09 ($17.98) and €19.95 ($27.40), respectively, represents an ongoing squeeze on profit margins for optical disc replicators.
IHS said the steady decline in disc sales and consumer spending on physical video formats over the last decade, combined with the cutthroat margins in the video supply chain, have resulted in a number of closures, mergers and capacity reductions across the entire disc-replication sector.
The research firm found that while financial difficulties have affected small- and medium-sized disc replicators — notably Cinram — Technicolor remains a success story.
“In contrast, Technicolor, which provides a broader range of video related services, reported positive earnings through 2013, largely on the back of stable earnings from DVD and Blu-ray,” analyst Thomas Nash wrote in a post.