Multiples are building on DVD sales through back catalogue items, but video sales have dropped by half
DVD sales continued rising relentlessly last year, with value in the grocery sector up a quarter by year-end to £2.2bn, according to Video Box Office.
However, the supplier of videos and DVDs to the c-store sector says most of the growth is coming from products more than three months old. This explains why all the major multiples are looking to build their strength in back catalogue items. Somerfield, for example, launched a budget range of back catalogue DVDs at the end of last year.
By contrast, the British Video Association says video sales have almost halved, dropping to £242m in the past year. Major retailers and suppliers are shifting away from VHS. Dixons stopped
selling video recorders last year and VBO is phasing out videos for rental, dealing solely in DVDs for new release rentals.
Rental sales have risen by 4% in the year to April 30, says the BVA, but not as fast as retail sales.
According to VBO, DVD rental and retail is especially lucrative for c-stores. It says that, with the rise of home entertainment systems, people are staying in rather than venturing out to the cinema. As a result, it is rolling out the DVD vending machine it launched at the Convenience Retailing Show in March, and aims to have installed 10 to 20 within the next six months, according to VBO national account controller Rob Standen.
However, the category is being hit hard by retailers’ drive for low prices. According to Verdict Research, the largest price cuts across home entertainment were in DVDs and video, with the sector hit by 3.5% deflation.
A Screen Digest report warns that, if prices continue falling, video retailers and distributors across Europe face a loss of sales of E7bn within five years. However, Verdict predicts deflation in videos and DVDs will slow to 2.9% this year.
Standen says another major trend in the next few years will be towards portable DVD hardware. “Between now and 2008, portable hardware will become increasingly important, especially with the growing popularity of DVD players in cars.”
DVD sales continued rising relentlessly last year, with value in the grocery sector up a quarter by year-end to £2.2bn, according to Video Box Office.
However, the supplier of videos and DVDs to the c-store sector says most of the growth is coming from products more than three months old. This explains why all the major multiples are looking to build their strength in back catalogue items. Somerfield, for example, launched a budget range of back catalogue DVDs at the end of last year.
By contrast, the British Video Association says video sales have almost halved, dropping to £242m in the past year. Major retailers and suppliers are shifting away from VHS. Dixons stopped
selling video recorders last year and VBO is phasing out videos for rental, dealing solely in DVDs for new release rentals.
Rental sales have risen by 4% in the year to April 30, says the BVA, but not as fast as retail sales.
According to VBO, DVD rental and retail is especially lucrative for c-stores. It says that, with the rise of home entertainment systems, people are staying in rather than venturing out to the cinema. As a result, it is rolling out the DVD vending machine it launched at the Convenience Retailing Show in March, and aims to have installed 10 to 20 within the next six months, according to VBO national account controller Rob Standen.
However, the category is being hit hard by retailers’ drive for low prices. According to Verdict Research, the largest price cuts across home entertainment were in DVDs and video, with the sector hit by 3.5% deflation.
A Screen Digest report warns that, if prices continue falling, video retailers and distributors across Europe face a loss of sales of E7bn within five years. However, Verdict predicts deflation in videos and DVDs will slow to 2.9% this year.
Standen says another major trend in the next few years will be towards portable DVD hardware. “Between now and 2008, portable hardware will become increasingly important, especially with the growing popularity of DVD players in cars.”
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