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Global Filmed Entertainment Distribution Industry Analysis

The worldwide recorded DVD and video industry was worth just under €47 billion in 2008 after declining almost 4.5% year-on-year, reports MarketLine. The market is expected to expand 20% in five years to exceed $56 billion by 2013. Sell-through represents the leading market segment, generating 72% of overall global recorded DVD and filmed entertainment market revenue.

Following the economic recession, consumers are now spending more due to economic recovery, an easing off in unemployment rates, and rising levels of disposable income. Growing consumer confidence and increased spending bodes well for discretionary services such as movie attendance, reports IBIS World. Other factors encouraging market growth include investment in 3D technologies on the part of movie theaters, which will attract more cinemagoers and boost the prices of theater tickets. Alternative services, such as video on demand, are likely to witness fluctuating demand while movie theaters are expected to record steady demand. 

Regional Market Share

The US DVD, Blu-Ray, video and game rental industry is going through a period of decline, according to IBIS World. This is due to technological progress making in-store rentals redundant as consumers have the easier option of online purchases and downloads. Other obstacles to market growth include the fact that rental companies have to compete with cable TV and internet rentals. The DVD, video and game rental industry is involved mainly in renting prerecorded physical media on discs containing video games or movies. The industry encompasses in-store media rentals and subscription for mail-distributed rentals. On-demand and web streaming rentals are not included in this market. The industry generates revenue through rentals but also through collecting fees for late return of materials.

The telecom and TV broadcasting industries have undergone changes in recent years due to the combining of the two strands of services, placing each industry in competition with the other. The EU digital media services market is set to continue drawing significant investment, report Paul Budde Comm. The majority of EU homes will be equipped with digital terrestrial TV (DTTV) by the end of 2012. As many as 20 EU nations were fully digitized by the beginning of 2012, with three putting off ASO until 2014.

Over 80% of the world’s portable DVD player and digital camera supply comes from China, according to research from Global Sources. Production, and research and development are benefitting from technological innovation in communications and mobile entertainment. Such technological advancements include energy-saving applications, 3D, high definition and network connectivity. Sales are rising due to supplier focus on shipments to emerging markets in the Asia-Pacific region. The US and the EU are the two main export destinations for most suppliers. The Chinese home entertainment market encompasses set-top boxes, DVD players, radios, TVs, Blu-ray, audio systems and home theater.

India’s entertainment market continues to record strong growth, with a variety of global production houses and corporations. NetScribes estimates over 1,000 films are released yearly, with over 3 billion tickets sold in the market. Growth is equally strong with vast potential in the overseas box office and home video market segments. India’s online movie rental market is still in the initial phases of its development, reports NetScribes. The industry generated more than $11 million in 2008. The market holds vast potential thanks to a large consumer base. Other factors positively impacting the Indian online movie rental market include rising levels of disposable income, an expanding base of internet users and growing popularity of entertainment. More and more films are also released each year, offering a wider choice of entertainment. Market penetration of DVD players and TVs is also driving the market, with increasing use of credit cards, and the growing expense of movie tickets, which is pushing consumers to opt for the cheaper alternative of online movie rentals. Obstacles to market growth include widespread availability of movies, cheap DVDs and VCDs, and the fact that the industry remains a capital-intensive one.

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Parent industry: Filmed Entertainment
Related markets: Television Set, Movie Production, Theater, Hotel, Pay TV, Movie Theater

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