Intense competition from kiosks, retailers and the internet has eroded industry revenue.
Melbourne, Australia (PRWEB) April 14, 2013
The Video and DVD Hire Outlets industry is not maintaining its share of total consumer expenditure on recreation and culture. This is due to significant competition for household discretionary income from several sources, such as the internet and pay-TV operators.
According to IBISWorld industry analyst Craig Shulman, “other retailers are continuing to encroach on the traditional territory of video stores, especially in the sale of DVDs and Blu-ray Discs, generally at reduced prices”. Companies outside the industry, such as Telstra, Optus and Fairfax Media, have begun offering digital video-on-demand services, while other companies have started online ordering systems, which feature posting DVDs to households. These services have extended hire periods at significantly reduced prices relative to video stores. DVD and Blu-ray kiosks (or vending machines), which are located at supermarkets and rent latest releases, are also a growing competitor to bricks-and-mortar video shops. Overall, these new competing services are causing DVD rental prices to decline. Furthermore, competition remains from illegal movie downloading through the internet.
IBISWorld estimates that the Video and DVD Hire Outlets industry will generate revenue of $661.6 million in 2012-13, indicating a decline of 14.8% per annum over the past five years. “This is due to both increasing competition from new digital media that allows easy access to film content and the adverse run-on affects from subdued economic growth,” says Shulman. Consumer sentiment has fluctuated. The main culprit has been significant rises in official interest rates and an uncertain global economic environment. In 2012-13, industry revenue is forecast to decline 17.8%.
In the next five years, industry revenue is expected to continue to fall. While sales of higher-priced Blu-ray products are currently accelerating and expected to replace lost DVD revenue, this is off a very low base and fails to attract households away from digital avenues. However, TV series and DVD boxed set sales are still buoyant. Rental disc kiosks are expected to continue to grow in popularity and prominence as they are seen as a low-cost alternative to traditional bricks-and-mortar rental outlets. This trend will lead to dramatic falls in industry establishments and employees over the next five years.
The four largest players in the Video and DVD Hire Outlets industry are Video Ezy Australaisa Pty Limited, Network Group Pty Ltd, Leading Edge Group Limited and Civic Entertainment Limited.
For more information, visit IBISWorld’s Video and DVD Hire Outlets report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of businesses and vendors mainly engaged in hire and sales of pre-recorded video DVDs and HD Blu-ray products and games for personal use only. Industry operators generally rent and sell DVDs and Blu-ray Discs, as well as some games and general merchandise, including snack food and drinks. Businesses can operate through a variety of mediums, including stores, kiosks, and mail order.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call 039-655-3886.