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SUMMARY
The DVD business is approaching saturation point in key markets, with the
release of thousands of new titles every year resulting in intense pressure on
shelf space for brick-and-mortar retailers. Even for online retailers, the
sheer volume of titles available is putting the supply chain under strain.
For retailers, the issue of how to reconcile the ever-expanding DVD catalogue
with intense pressure on shelf space is becoming increasingly urgent.
Meanwhile, for rights holders, there is growing concern that only the most
popular titles can secure shelf space. Proponents of on-demand media (ODM)
argue that this technology has the potential to address these problems.
This report addresses the arrival of commercial ODM services that will enable
retailers to offer content without the constraints associated with stocking
extensive physical inventory. It assesses first phase DVD manufacturing
on-demand solutions and looks ahead to next generation services that will
support digital delivery to portable video devices and flash storage.
The report examines the ODM supply chain and compares in-store and online
solutions, including detailed forecasts for both sectors in the US and Europe.
It evaluates potential business models and technological hurdles, as well as
profiling the service providers emerging in this sector. In addition, it
offers a genre-by-genre analysis of ODM from a rights holder perspective and
outlines opportunities and obstacles. The report also considers what impact
this technology will have on specific retail channels, from specialist video
retailers to non-traditional outlets.
Key findings:
- The ODM market will initially be focused on 'long tail' content as rights
holders move to exploit niche titles not considered commercially viable in the
traditional DVD supply chain.
- As the number of participating rights holders and retailers increases, the
ODM market has the potential to expand to include more mainstream content.
- Transactions through online ODM (e-tail solutions) will grow faster than
in-store ODM (brick-and-mortar retail solutions) because the method of
manufacturing is invisible to consumers so will not require them to adjust to
new technology to the same extent as in-store solutions.
- TV and other non-film content features heavily in ODM services and is
often available on an episodic basis allowing consumers to create compilation
DVDs.
- Unlike the traditional DVD supply chain, ODM enables rights holders to
monetise content with a short 'shelf life' such as sports fixtures.
- Catalogue movies will dominate the ODM market as the sector develops with
rights holders and retailers offering more library titles through these
services.
At the outset, a large proportion much of the content accessible through ODM
solutions will not be available through traditional distribution channels,
meaning that ODM transactions will be largely incremental to the existing
video business. However, as more mainstream content is made available the rate
of cannibalisation will increase exponentially.
In the report:
- Forecasts for in-store and online ODM transactions and spending in the US
and Europe to 2012.
- Breakdown of potential incremental and cannibalistic ODM transactions and
spending to provide net DVD sales.
- Assessment of current DVD landscape and potential impact of ODM solutions.
- Analysis of the ODM supply chain, including examination of potential
business models and insight into revenue splits and margins.
- Identification of key players in the ODM space and their respective
strategies.
- Evaluation of rights holder opportunities and implications for the retail
environment.
TABLE OF CONTENTS
Executive Summary
The DVD landscape
On- demand media
- What is on- demand media?
- Back story
- ODM solutions
- Pros and cons of each model
- Setting up an ODM solution
- Business models
- Supply chain
- Technological issues
- ODM service provider profiles
What does ODM offer the rights holder?
- ODM as an opportunity
- Potential obstacles for ODM
- Which genres are suitable for ODM?
- ODM and the long tail
Retailer perspective
- Diversification of video retail
- Potential impact of ODM
- ODM solutions in the field
- Geographical concentration of ODM
- ODM deployment by retail channel
Tables and charts
Executive Summary
- In- store ODM genre splits
- Online ODM genre splits
Market forecast
- US: In- store ODM volume
- US: In- store ODM value
- US: Online ODM volume
- US: Online ODM value
- Europe: In- store ODM volume
- Europe: In- store ODM value
- Europe: Online ODM volume
- Europe: Online ODM value
The DVD landscape
On- demand media
- US: Physical vs. digital retail 2007
- Europe: Physical vs. digital retail 2007
- ODM pricing scenarios
- ODM flow of funds
- Average ODM revenue split
- Average off - the- shelf DVD revenue split
- ODM revenue model 1: Catalogue movie
- ODM revenue model 2: Children's programming
- Broadband penetration vs. DVD penetration 2007: US & Europe
- Download times
- Digital retail market shares
What does ODM offer the rights holder?
- Evolution of the DVD business: US & Europe
- Europe: DVD sales by genre
- US: DVD sales by genre
- How the long tail works in the UK DVD market
Retailer perspective
- UK: DVD retail market by retail channel
- US: DVD retail market by retail channel
- Evolution of DVD pricing in US & Europe
- Relationship between time spent in- store and spending
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