On-demand may fill in gaps for DVD lag

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On-demand media could help replace falling DVD revenue and bolster industry players' financials, according to a report published here Wednesday.

The research from U.K.-based specialist Screen Digest predicts that the on-demand sector will generate $33 million in incremental revenue this year in the U.S. and the major European markets, and that it will be worth $1.1 billion in consumer spending by 2012.

Two-thirds, or $665 million of this amount, will be new revenue, while the remainder will replace traditional DVD spending, the report predicted.

With the home video business approaching a saturation point in many markets and high street and online retailers struggling to accommodate an ever-expanding DVD catalog, on-demand media will provide a growing outlet.

On-demand services are expected to enable retailers to offer a huge range of titles "without the constraints associated with the traditional video supply chain," the report said.

"The industry has an opportunity to establish a viable (on-demand) business, both in-store and online," Screen Digest analyst and study author Marie Bloomfield said. "Retailers, rights holders and consumers can all benefit from the on-demand retailing of a wide range of video content, and overall the industry has the potential to reap significant financial value from a well-executed on-demand strategy."
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