Barring UltraViolet success, home video biz will continue decline

A years-long decline in the home video retail market will continue and worsen unless the newly-minted digital locker system UltraViolet picks up steam, said an analyst at research company IHS. According to the firm, spending on disc-based movies and TV shows has fallen by billions in the past seven years to land at the current $9.9 billion figure.

Despite the growing popularity of digital content, its sales have done little to counter a fall-off predicted to hit $8.1 billion in 2015.

"In the absence of easy access to all their purchased content across all their proliferating number of screens, consumers have been cutting back on buying discs, while the growing electronic sell-through market is simply too small to make up the difference," said Tom Adams, IHS principal analyst and director, U.S. media.

With many consumers now enjoying myriad home viewing options and opting to rent and stream instead of buy, something needs to change for studios to stay in the game, he added. That change could be UltraViolet, which grants consumers the ability to download and watch legal digital versions of purchased movies across several devices.

The analyst pointed out that if Ultraviolet can spur sales, movie studios won't need to worry about lackluster electronic sell-through.

"There are two advantages to a disc-focused strategy," explained Adams. "First, tens of millions of the studios' best customers will be quickly exposed to the UltraViolet pitch in the box. Second, if UltraViolet sparks just a seven percent increase in consumer disc buying in the years ahead, it would pay off for studios as much as a doubling of the EST business."

So far, Hollywood heavyweights including Warner Home Entertainment Group, Sony Pictures and Universal have jumped on board, offering UV versions of select home releases, including "Green Lantern," "Harry Potter and the Deathly Hallows Part 2" and "Cowboys & Aliens," this fall. (via IHS)

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