Total UK video entertainment sales across all platforms amounted to £1.012 billion in the first half of 2011 – down 5.7% year to date, reports the British Video Association. “Predictably, given last week’s weaker than expected GDP figures for the same period, the video industry has not been immune from the squeeze on consumers’ discretionary spending.”

The BVA points out that this is still favourable compared with record successive quarterly falls in spend of 5.9% and 1.4% on recreation and culture (reported by Visa) and the 7.4% drop in electrical household appliances recorded in households goods store (by Haver Analytics).

However, an 18% increase in consumer spending on digital video transactions is an indication of how the video entertainment business is evolving in the UK. “With 44 individual services from which content can be downloaded or streamed to connected devices across a range of internet and commercial TV-based platforms, consumers now have more choice than ever in the way they access video entertainment,” says the BVA.

Physical discs remain the most popular way to watch video, accounting for 96.5% of all sales by value in 2010. Although disc sales in the first half of 2011 were down 8.1%, as reported by the Official Chart Company, physical sales of music albums and console games also saw values fall, by 10.4% and 13% respectively, according to Kantar’s Worldpanel. IHS Screen Digest predicts that discs will still account for 88% of all video purchases by 2015.

Since Christmas gifting is such an important feature of Q4, representing 35% of total annual sales in 2010, the BVA is anticipating better retail sales performance in the second half of the year. The 3% rise in the year-to-date UK box-office performance will feed into the video entertainment market in the second half of 2011. Big opening weekends for Transformers: Dark Of The Moon, Pirates of the Caribbean: On Stranger Tides and record-breaking Harry Potter and the Deathly Hallows Part 2 all provide very encouraging signs for video sales in the run up to Christmas, says the BVA.

“The first half has been a bit of roller-coaster, with wallets and purses squeezed, but despite that people still found more than a billion pounds to spend on video entertainment, the vast majority on physical formats,” Lavinia Carey, Director General of the BVA, commented. “Digital is growing and has huge potential with the growth of internet-connected devices such as smart phones and tablets now an accepted norm for video viewing.

"FutureSource Consulting found that in 2010, 15% of the 50 million mobile phone owners in the UK used them to view video content. For non-iPhone smart phones it was 24%, rising to 67% of iPad owners. But we still see Blu-ray and DVD dominating the market for this year and many more to come.”

Paul Dempsey, a BVA Vice Chairman, runs BBC Worldwide’s Consumer Products division. The division, mainly made up of video, just posted record profits of £48.9 million for 2010/11.

“DVD remains an attractive business. We’ve been selling TV on video since the early eighties and our business is at record levels of profitability since then,” Dempsey says. “In digital, we’re iTunes’ biggest TV partner in the UK and we’ve sold around 22 million downloads with them since launch. We achieved £9 million in sales from digital downloads in the last year and I can only see that growing exponentially.

"But, importantly, physical remains a fundamental part of our business – and it will for years to come. We sell around 50 DVDs every minute, of every day across the world, which is hard to reconcile with some of the downbeat figures we often see quoted. For me, the DVD boxset has some years left in it yet. Looking ahead to this Christmas, I’d say our line-up is, if anything, bigger than in 2010.”


Top 10 titles by DVD & Blu-ray disc sales to 30 June 2011

Harry Potter – The Deathly Hallows Part 1 (Warner Home Video) has already sold over 2 million discs and had the biggest week 1 sales so far this year of 1.6 million discs

The King’s Speech (Momentum) – over 1.2 million units

Despicable Me (Universal Pictures) - 854,000 units, tops the children’s chart

Paul (Universal Pictures) – 593,000 units, new release in June

Inception (Warner Home Video) (released in 2010) – 511,000 (Jan-June 2011 only)

Tangled (Walt Disney) – over 507,000, No 2 in the children’s chart

The Hangover (Warner Home Video) – 418,000

Taken (20th Century Fox Home Entertainment) – 415,000

Due Date (Warner Home Video) – 347,000

Grown Ups (Sony Pictures) – 223,000

Story filed 03.08.11