OUGD405 Studio Brief 2 | Facts & Statistics | #2

I wanted to look at if, how and why DVDs are becoming more unpopular and this information will help me present this topic.

I got a lot of information from this PDF which is the economics report from the BVA.

http://www.bva.org.uk/media/89252/bva-morethanasupportact-with-new-map-for-bbc.pdf

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The move to accessing media content through digital and/or mobile devices will
be a key issue in future years. According to a recent Ofcom report:
• UK consumers are spending almost half their waking hours watching TV, using
their smart phones and other communications devices;
• mobiles have become an accepted entertainment device, with nearly 11% of
people saying that they would be likely to watch a full TV episode on their
mobile;
• among 16–24 year olds, over half (52%) of media activity is simultaneous,
compared to just over one fifth (22%) for people aged over 55.

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The increasing availability of digital platforms offers a major opportunity for the video entertainment sector. The key question is whether this huge potential market will actually convert to paid‐for video usage. Research by Kantar Worldpanel indicates that just over half of the GB population (54%) accessed some form of legal digital service during 2010 and that just over one quarter (26%) of the population paid for digital content at least once, with 18% of the population having used paid‐for digital services at least three times. This indicates that paid‐for digital content is not just a novelty but that consumers are adopting such services as part of their mainstream activity. In the age of Facebook and YouTube, consumers have become accustomed to expecting instantaneous communications and interactive responses within the digital environment. It is not surprising, therefore, that when asked why they watch paid‐for digital content, the top three reasons provided by consumers are instantaneous delivery, flexibility and convenience. In tandem with the development of digital media in general has been the rise of catch‐up TV such as BBC iPlayer. The Kantar Worldpanel survey found that the growth of new users of paid‐for digital products was likely to come from users of free catch‐up TV. Take‐up of iTunes also demonstrates this trend: 58% of iTunes users who 'trial' the iTunes paid‐for video service become regular users. This indicates that familiarising users with the advantages of digital capabilities, encourages further paid‐for usage. Free catch‐up TV may serve as a springboard to drive digital audiences to paid‐for services.

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Digital

The previous section shows how numerous companies within the UK video

industry are already responding to consumer demands for digital delivery.

However, the digital marketplace also presents challenges, such as replacing the

falling sales of physical discs with paid‐for digital sales. Between 2009 and 2010,

DVD sales of feature films declined by 5.7%, however, revenue from film

downloads‐to‐own declined less than film revenues as a whole (down 1.4%).

During the same period, the percentage decline in physical sales from TV

downloads‐to‐own outstripped the overall percentage revenue decline in physical

TV sales. Bearing in mind the importance of video entertainment revenues to this

market (as considered in previous sections) it is vital that adequate returns are

achieved from digital media.

Consumers place a high value on instantaneous delivery of media content and

there is strong 'willingness to pay' for immediacy, offering opportunities for video

entertainment providers to ensure future revenues through strategic digital

delivery and pricing strategies.

Catch-up TV

Catch‐up TV (such as BBC iPlayer) is another area offering both opportunities and

threats to the video entertainment sector. In theory, free catch‐up services

compete with video entertainment revenues through consumers substituting it

for the rental or purchase of video entertainment products. This could lead to a

decline in video entertainment sector revenues, with the knock‐on effect being a

reduction in future investment in British production. A contrary view is that catch‐

up TV can be seen as a marketing tool, increasing viewers’ familiarity with digital

services and awareness of content that people might subsequently pay to view; it

could shift behaviour so that purchasers of video entertainment would be those

who were sceptical of replacing physical discs with content they want to rent or

keep to view many times, perhaps on a variety of different devices. The

implication is that in time consumers may also be willing to pay for premium

quality in Premium windows, thereby reducing the reliance on revenues from

physical discs and the potential cannibalising effect of free catch‐up services.

Broadband Speed and Penetration

The Ofcom Communications Report 2010 shows that total broadband penetration

stood at 71% of households in the first quarter of 2010. However, for the video

entertainment sector, the primary concern is the availability of high‐speed

connections. The European Commission report Single European Electronic

Communications Market (2010) noted that in the UK the share of high‐speed lines

above 10Mbit/s comprised just 19.8% of all connections – below the EU average

of 23.3%. Within the UK, there are geographical inequalities: rural areas have

slower speeds than the UK average and Wales, Scotland and Northern Ireland lag

behind England in terms of broadband speed.

An important initiative is the development of initiatives such as UltraViolet, which

is planned for roll‐out in the UK market in the near future. This technology

improves the interoperability across multiple platforms and devices such as

computers, TVs, game consoles, smart‐phones and tablets enabling consumers to

watch TV and film content seamlessly and easily. UltraViolet will enable multiple

users in one household to access UltraViolet‐compatible content, which may be

downloaded and moved to several devices.