U.K. No. 3 Disc Market in the World10 Apr, 2014 By: Erik Gruenwedel
Sales of DVD and Blu-ray titles outperformed Europe; rivaling U.S., according to research report
Despite a 7% decline in packaged media sales in 2013, the U.K. home entertainment industry outperformed the rest of Europe, equaling trends in the United States, according to new data from Futuresource Consulting.
The United States and Japan rank as the top two home entertainment markets globally.
The London-based research firm said that despite the decline in U.K. disc sales, packaged media still represents the majority of home entertainment consumer spending.
“At almost £1.6 billion, the U.K. remained the third largest packaged video market in the world and the largest in Europe, although this title could be challenged by Germany in 2014," David Sidebottom, senior market analyst at Futuresource, said in a statement.
Sidebottom said packaged video is set to lose £1 billion in consumer spending through 2018 as digital video service penetration increases, both from increased on-demand capability of pay-TV operators and growth in subscription streaming services such as Netflix and Amazon Prime Instant Video.
"Netflix has established itself as the leading player in the U.K., primarily due to strong TV franchises and wide availability,” Sidebottom said. “But with the launch of Amazon Prime Instant Video, integrating Lovefilm and effectively replicating Amazon's U.S. video strategy, combined with the newer movie focus of Sky's Now TV, the consumer's choice of premium video viewing has never been greater, which in turn is driving industry revenue."
The overall U.K. digital video market grew by 47% in 2013, to reach almost £450 million, driven largely by SVOD subscriber growth, which Futuresource said would help the overall digital sector exceed £1 billion in revenue by 2017.
Meanwhile, U.K. pay-TV household penetration reached 57% in 2013 — driven by satellite-TV operator Sky — with average revenue per subscriber topping £33 ($55), one of the highest ARPUs in the world.
Indeed, overall video entertainment spend in the United Kingdom is expected to reach £10 billion by 2018, averaging 2% annual growth between 2014 and 2018.
"As the evolving retailer and service provider offerings continually shape consumer behavior, the U.K. is becoming one of the most dynamic digital video sectors globally,” Sidebottom said.