New films and high quality TV dramas are becoming increasingly reliant on projected video entertainment sales revenue in order to be green-lighted for production, according to an independent survey conducted by Oxford Economics. The study, commissioned by the British Video Association, shows that video revenues account for 47 per cent of revenues of feature films and 34 per cent of TV series and dramas.
The rapid rise of the video retail market was stimulated by the popularity of DVD, which provided a very healthy return on investment for film studios. Accordingly, as the largest video market in Europe, the UK’s video industry has been a major contributor to the film business. However Oxford Economics’ report demonstrates that production of independent film and television drama is even more reliant on video entertainment, and in the case of some independent films, which have difficulty in securing widespread cinema distribution, 70 per cent to 80 per cent of their revenues are derived from video exploitation.
The importance of video entertainment is another factor that has seen those involved in the production and distribution of content provide a multitude of different ways for audiences to access video entertainment, through traditional sales and rental of physical discs to new digital downloading and streaming services, says Oxford Economics.
According to the research consultancy, there are now over 30 digital destinations where UK consumers can rent or buy video entertainment to view on any number of devices, reflecting the expanding range and choice for audiences to access video content at times and in places that suit their changing demands.
It suggests that consumers are in the driving seat,with latest research demonstrating that there is no single trend in video consumption, as in the past when audiences migrated from one format to another in a linear fashion. Instead they are watching video content in more diverse ways. Over half the population (54 per cent) used some form of digital provision to watch video in 2010, with over a quarter (26 per cent) paying for this service, as timeliness, flexibility and convenience of digital delivery are increasingly appreciated by today’s viewers.
Oxford Economics points out that the rise of Internet-connected TVs to add to the array of new devices on which video can now be accessed means that the benefits of online services are increasingly being introduced into the living room to complement the greater choice of standard definition DVD, high definition Blu-ray Discs and TV VoD propositions that have been available for many years.
The report emphasises that this is an opportunity for the video industry to introduce viewers to innovative new services; the benefits of digital video will be all the greater when consumers’ expectations for timely and flexible services are more easily deliverable. This depends on the introduction of such initiatives as UltraViolet, the standardisation of digital specification that improves interoperability of content between devices and also the necessary penetration of high-speed broadband to make new services available and a rewarding experience for viewers throughout the UK.
Ed Vaizey MP, Minister for Culture, Media and the Creative Industries, described the creative industries as “very important to the UK economy” and pointed out that when people go to see a film or any production, they don’t realise is that a lot of the money is made not just by the theatrical release but by people buying the DVD or downloading the video at home, or selling it to television. “So video is massively important, it is the unsung hero of the creative industries, it is the industry that creates the profit that keeps the creative industries going,” he said.
Lavinia Carey, Director General of the BVA, remarked that the whole audio-visual industry in the UK was worth £10.8 billion (€12.2bn), employing thousands of skilled people and both revenues, with employment now increasingly reliant on the video entertainment sector. “Effectively, the ‘tail’ is now definitely wagging the dog,” she said.” Video entertainment remains crucial to the commissioning and production of great TV drama and films. No video means no film and TV, as simple as that. The future of video is bright, but we need to increase interoperability, household penetration of high-speed broadband and continue to tackle intellectual property theft to make sure we as an industry sustain the support for film and TV production.”