Germany to Pass U.K. to Become Europe's No. 1 Blu-ray Market

Despite Blu-ray hits like "Woman in Black," the U.K. market for the format is in decline.

Home entertainment revenue in Germany is set to grow 6.4 percent to $2.2 billion this year with 32.2 million Blu-ray discs sold.

BERLIN – Germany is set to pass the U.K. this year to become Europe’s No. 1 market for Blu-ray Discs as the traditional home entertainment business continues to chug along despite threats from piracy and VOD.

A forecast published Thursday by industry analysts IHS indicates that 32.2 million Blu-ray Discs will be sold in Germany this year, an increase of nearly 40 percent year-on-year. This compares to the U.K., where Blu-ray unit sales will be below 19 million (18.7 million) in 2013.

Revenue from Blu-rays alone in Germany is set to top $638 million (€463 million). Overall, Germany’s home entertainment market is bucking the downward trend seen across Europe, with consumer spending on Blu-ray Discs and DVDs combined set to increase 6.4 percent to $2.2 billion (€1.6 billion) this year. IHS analyst Tania Loeffler gives much of the credit for the German Blu-ray boom to German retailers, both brick-and-mortar chains such as Media Markt and online operators like, which have pushed Blu-ray as a premium format for the tech-savvy German film fan. Retailers in the U.K., in contrast, have been suffering of late, as seen with the collapse earlier this year of veteran Brit chain HMV and the closure of Blockbuster’s U.K. outlets (Blockbuster did not have stores in Germany). IHS has estimated the physical rental of DVDs will fall by a drastic 53.2 percent this year and Blu-ray Disc sales plunge by 61.3 percent.

“The fact that Germany still has strong bricks and mortar video retailers like Media Markt and Saturn is a very important market advantage over the U.K.,” Loeffler told The Hollywood Reporter. “They heavily promoted the format, positioning themselves as the 'home of Blu-ray,' and they competed head-to-head with This had the effect of driving average price down in Germany, but the heavy exposure (compared to in other territories) that resulted from this direct competition, made German consumers more aware of the benefits of BD as premium format.”

British supermarkets are among the primary retail outlets for video sales but chains like Sainsbury’s, Asda, Morrison’s and Tesco have cut back on stock and have a very limited range of films with a focus on new releases and chart titles.

Loeffler estimates that Germany, which last year accounted for just under a third (32.4 percent) of total Blu-ray Disc sales in Western Europe, will increase its share to 40 percent by the end of this year. By 2017, she forecasts, some 36.5 million Blu-ray Discs will be sold annually in Germany, 44.1 percent of the 82.7 million sold across Western Europe.  In contrast, number of Blu-rays sold in the U.K. will barely budge, with IHS forecasting a total of 19 million unit sales in 2017.

“The second key to the success of the Blu-ray disc (BD) format in Germany is that the majority of BD enabled households consist of standalone BD players as opposed to BD enabled game consoles,” Loeffler writes in her report. “IHS Electronics & Media analysis indicates that consumers with a standalone BD player purchase more discs on average every year than owners of Blu-ray enabled Sony PlayStations.”

Another key difference between the German and U.K. markets is the lack of major competition from VOD providers. The penetration of personal video recorders in German households as well as pay-TV VOD services lags behind the rest of Western Europe. Netflix has yet to launch in Germany and Amazon’s VOD operation LoveFilm, while a significant player, has not yet proved a game changer for the home entertainment market here.  

IHS forecasts that while on-demand households will increase in Germany – to just under 11 million by 2017 – they will still represent a small fraction of the country’s nearly 40 million TV households. In comparison, just over the border in The Netherlands, 3.1 million of that country’s 7.4 million total TV homes are on-demand equipped.