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Thursday, October 8, 2015
U.K. Physical Media Market To Keep Falling In Q3 2015

Sales of both DVD and Blu-Ray discs in the U.K. are expected to continue to decline in the third quarter of this year, mainly to the market continuing its shift to other forms of media.

IHS forecasts show full year DVD sales in 2015 reaching 105m units and BD 16.1m units. These figures represent a decline of 16.4% in DVD unit sales and are expected to generate 15.3% in consumer spending to £875m.

For BD, unit sales are forecast to fall by 8.2% to 16.1m, and consumer spending to decrease by 9.6% to £22.2m.

Combined disc sales are therefore forecast to decrease to 121m units, generating total market retail spending of £1.084bn, a decrease of 14%.

IHS's UK physical video forecasts for 2015 through to 2019 remain unchanged in light of Q3 2015 results reported by the British Video Association (BVA).

According to data compiled by the Official Charts Company and published by the BVA consumer spending on buying physical video in the UK fell to £664m ($1,021m) in the first three quarters of 2015, an increase of 14.9% over the same period in 2014. Total unit sales to consumers declined by 16.3% to 76.96m over the first three quarters compared to 2014.

The average sales price (ASP) of a video disc in the UK has slightly increased to £8.63, up 1.6% despite a 1.3% decline in BD ASP. This reflects an increase of 1.8% in the average sales price of a DVD.

Sales of DVDs, which account for 86.8% of the market by volume, declined to 66.8m in the first three quarters, 17.2% lower than in the first nine months of 2014. Consumer spending on the format also declined, albeit slightly less severely, down 15.7% to £535.7m, with a 1.6% increase in ASP to £8.02 lessening the decline. The UK also reported a decline in the volume of BDs sold; the 7.7m units sold were down 1.16m units over the same three quarter period in 2014. This decrease in BD sales continues the decline from peak sales of 12.3m in 2013 across the same period, and 18.8m for the full year.

With the 4K video entering the home entertainment space, consumers will soon be faced with multiple options for viewing Ultra HD content. The installed base of 4k sets reached 126,000 at the of end of 2014, according to IHS analysis, and is forecast to rise to just under a million by the end of this calendar year. This means that the potential market for these products is no longer insignificant.

In order for UHD BD to be a success, however, consumers will need educating both in the compatibilities of the format, and in terms of the higher quality of the resulting video when compared to streamed or broadcast content using lossy methods of compression. The Blu-ray Disc Association has drafted specifications for the Ultra HD Blu-ray Disc, and new players will be backwards compatible with current BD formats, although older standard players will not be able to play UHD BD.

The new logo, which proudly displays "UltraHD", will go some way to assist in communication, however consumer uncertainty has long been the bane of BD and education in terms of how the new discs can be played and which content is available will be an absolute necessity for the success of this format.

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