BFI: VoD growth impacts value chain

ipadFindings in the 2013 BFI Statistical Yearbook record a growth of 50 per cent in the UK’s Video on Demand (VoD) market, which the film industry trade body says has implications for the whole film industry value chain.

The Yearbook highlights significant changes in the way audiences enjoy films, with changing demographics of cinema audiences, challenges in the distribution sector, shifting patterns of film consumption away from physical video (DVD, Blu-ray), and rapid growth in the VoD market, worth £243 million in 2012, having far-reaching implications for the entire film value chain.

Amanda Nevill, Chief Executive of the BFI, said it was “encouraging” that UK audiences of all ages embraced the cinema experience and it was “very exciting” that the industry may be heading towards a tipping point in audience use of Video on Demand services. “But we can’t fully explore this growing new market without the numbers, so we need providers of Video on Demand services to release robust data to help us better understand and analyse the emerging VoD market for the benefit of the entire UK film industry,” she declared.

According to the BFI’s findings, while cinema admissions and box office takings increased in 2012, revenue from the sales of feature films on video (DVD, Blu-ray), though still significant, fell during the year to £968 million – their lowest level since 2001 and down from over £1.1 billion in 2011. Video rentals of films were also down, from 86 million in 2011 to 78 million in 2012, with the value of the rental market for film falling from £246 million in 2011 to £229 million in 2012.

The BFI suggests that the VoD market may be growing into the gap left by video. The total VoD market for film was estimated to be worth £243 million in 2012, a 50 per cent increase on the previous year, with audiences increasingly streaming films online using subscription services such as LOVEFiLM Instant and Netflix, leading to a 123 per cent increase in online film revenues (worth an estimated £122 million) during the year.

“With broadband speeds increasing, smartphone and tablet ownership on the rise and Internet-enabled television sets becoming more commonplace, the BFI expects further shifts in the consumption of filmed entertainment over the coming years. As VoD develops and matures it is more important than ever for robust data to be made available to the film industry, to help widen understanding of this exciting growth area, particularly for independent and specialised film,” it says.

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