Grim outlook for film, video distributors
Australia’s film and home entertainment distributors face years of declining revenues and profits due to piracy, downloads and plummeting DVD and Blu-ray sales.
That’s the grim outlook from IBISWorld’s Motion Picture and Video Distribution report. Industry-wide revenues are predicted to fall by 3.6% to $1.8 billion in 2014-15, with profit margins of 8.3% or $150.8 million, according to the market researcher.
More ominously, revenues are forecast to drop by 2.5% per year to $1.6 billion in 2019-20 due to film piracy and further declines in DVD and Blu-ray prices and sales.
The report predicts Australian B.O. takings will slip by 1.8% to $1.08 billion in calendar 2014.
In 2014-15 DVD, Blu-ray and VHS wholesale sales will fall by 8.7% to $730 million as the number of units drops by 5.2% to 55 million, it says.
In terms of market shares, the report has Warner Bros. Entertainment in pole position with 18.1%, followed by Village Roadshow’s 16.5%, Sony Pictures Home Entertainment at 10.8%, Twentieth Century Fox Home Entertainment 6.6% and Paramount Home Entertainment 4.7%.
“A positive for the industry is expected to be increased demand for content from digital pay-TV operators for the supply of popular video-on-demand and other value added services,” it says.
“Demand is also expected to increase from free-to-air TV stations, with the introduction of further SD multi-channelling using digital technology. Of critical importance will be rising demand from new media to view films on mobiles, computers and TVs linked directly to the internet. The increased popularity of 3-D film releases at cinemas will also be a positive for the industry.”