Market Watch

Snow Impacts on European Video in 2010


Display Driver IC Forecast


IHS Screen Digest analysis of the latest results from the three largest European video markets - UK, Germany and France - indicate that overall spending on packaged video in Europe declined by just under three per cent in 2010:

  • Consumer spending on buying and renting physical video in the UK ended at £2bn in 2010, a decline of 3.5 per cent over 2009, according to UK trade association the BVA. In total, British consumers purchased a combined 223m DVD and BD units, a decline of 8.2 per cent on the year.
  • For Germany 2010 was the second consecutive year of growth for video, according to data from the German trade association BVV. Overall, German video retail unit sales were up by 2.5 per cent to 115m; total spending on buying video was up by one per cent to €1.3bn.
  • French consumers spent €1.2bn on buying DVDs last year, a decline of 5.1 per cent; BD spending was €173bn, up by 61.6 per cent, according to French film body the CNC.
Analysis
Overall, while performance in France and Germany was stable compared to the decline in the UK, these figures fell short of market expectations. In 2010 both Christmas Day and New Year's Day fell on Saturdays, effectively closing stores to shoppers for two key shopping days. As a result retailers and shoppers alike would have been expected to focus their efforts into the first two weekends of the month. Unfortunately for most northern European territories those weeks coincided with the coldest December in 100 years. The snow that fell over this period brought many European capitals to a standstill and to the surprise of many, Berlin was found to be just as susceptible to extreme weather conditions as London or Paris. Prior to December, video results in all three markets were tracking well and had it not been for the uncharacteristic weather European video results could have been much more positive. Thus the relatively less than enthusiastic performance of video in the three top European markets by year end 2010 should not be seen as a stalling of consumer interest in packaged video but simply an unfortunate outcome of extreme weather. However, the bad weather could have a longer-term impact on the retail environment in these territories - most notably in the UK where HMV, the 'last man standing' in the once strong specialist audiovisual retail sector, recently issued a second profit warning (See separate update).

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