One world? No way
January 24, 2008

One might assume that the home entertainment business internationally is one big, relatively homogenous market, similar to the U.S. But that would be a mistake.

Consider that the U.S. and international markets for sell-through DVD are roughly the same size—$15.9 billion in the U.S. in 2007, according to VB research, and $17 billion internationally, according to data collector Media Control GfK, which is sort of the Nielsen of international markets. U.S. DVD sales fell 3.3% last year, and international sales fell 2.9% after adjusting for fluctuations in currency exchange.

Blu-ray Disc is also winning the format war internationally, as it appears to be in the U.S., selling more than three times as many discs as rival HD DVD by the end of the year.

So far, so similar.

Media Control GfK, however, measures DVD sales in 15 separate territories that it estimates account for 87% of DVD sales outside the U.S. when combined. A glance at the top titles in those territories shows that the international “market” is anything but homogenous. Topping the 2007 charts in the U.K., which is the largest territory by far outside the U.S. and represents almost one-third of international sales: Casino Royale. In No. 2 Japan, Pirates of the Caribbean: At World’s End; No. 3 France, Pirates: Dead Man’s Chest; No. 4 Germany, Harry Potter and the Order of the Phoenix; and No. 5 Australia, Transformers.

Growth, or lack of it, also varies widely around the developed world. While international sales volume (units) overall grew 3.4% last year, according to Media Control GfK, the U.K. was up 9%; Japan down 14%; France down 10%; Germany up 3%; and Australia up a whopping 28%.

Pricing is all over the map too, with the average title selling for the equivalent of 24 Euros in Japan, but less than 11 Euros in Australia.

Finally, the major Hollywood studios—which account for a 90% market share in the U.S.—rep only about 60% of the international market, with local distributors still making a strong showing, although their combined share fell 7% last year.

Clearly, there is more potential for the studios outside the U.S. than in it, but the international market also is far more complex than the one here at home.

Posted by Marcy Magiera on January 24, 2008 | Comments (0)