The Home Entertainment industry is on the move. The ‘talk’ is of a rise in streaming, paid for and online TV services; more and more consumers are prepared to pay for content online. Further chatter within the Home Entertainment industry is of how you harness the digital download world, how you continue to get people paying for your product but through a digital download, and this is a good direction to be moving in, particularly as profit margins on downloading a film on iTunes for example are far greater than selling the DVD.
According to Lavinia Carey, the British Video Association’s Director General, there are now 57 different digital services which consumers can use to view content legally. This clearly makes it easier than ever for people to view what they want when they want it. Digital rental transactions are said to have risen by 15% in value in 2011 and 12% in terms of transactions which equates to 71 million. However, despite this, the current model is still to push DVD and BluRay (BD) sales and rightly so. Digital may be the future but with regards to film watching DVD/BD’s still rule. Consumers spent £1.75 billion on over 207 million discs in 2011 with the total video entertainment sector estimated to be worth £2.25 billion in consumer spend in the last 12 months.
The challenge then for Home Entertainment clients is twofold. Firstly, with the array of illegal downloading sites available, how do you get people prepared to pay for your film release? Is this through additional content, bundles etc? The second is how to spread your marketing budget in order to drive sales of both discs and digital sales.
Presently, most studios still focus on discs with just the occasional nod to digital, but some are starting to incorporate digital more overtly, for example, The Morrison’s tagged ad for the 20th Century Fox distributed Rio. This focused on ‘triple play’, aligning the DVD with kids watching in their rooms, the BD with the ultimate in family living room entertainment and digital download for the kids to watch on the move.
It’s easy to see individual strategies for the different platforms developing as time goes on which will inevitably stretch budgets. The challenge for media agencies is how to incorporate a digital message and what weight of importance to give this message but with the flexibility which is going to be required as time rolls on and digital downloads become increasingly important and an increasingly larger portion of overall revenue.