U.K. video biz hot in June

New-release volume jumps 48.4%

Britain's DVD sell-through market climbed 38.5% in volume in June as foul weather forced consumers to seek indoor entertainment like Universal Pictures U.K.'s "Hot Fuzz," according to official figures obtained by The Hollywood Reporter.

The report, circulated by the British Video Assn. to member companies, saw new-release volumes increase sharply — up 48.4% — and catalog numbers jump 35.4% for the month. June also saw DVD value climb 25.7% from the comparable period in 2006 to £180 million ($356.7 million).

The monthly uptick contrasts with a January-June value decline of 3.2%, to £873 million, as a fierce U.K. price war continues to see supermarkets, specialists and generalist retailers slug it out for market share in-store and online.

The top title for the year, Sony Pictures Home Entertainment's "Casino Royale," was sold on release by Wal-Mart-owned supermarket Asda for £7 ($13.90) — £5 ($10) below cost — and so far has moved nearly 2.3 million units. Far behind in second place was Fox Pathe's "The Queen," with sales of 940,000 units, and "Hot Fuzz" was close behind with 933,000. Overall, volume was up 12.6% for the half year.

The top distributor for the six-month period was 20th Century Fox Home Entertainment, with a 17.8% share. Universal was second with 15.4%, followed by Sony with 12.1%.

At the U.K. retail level, the increasing power of the supermarkets is being felt. For the year-to-date, the grocery sector has seen total volume rise 33%. Supermarkets accounted for almost 34% of all DVD sales for the six-month period.

For the few remaining specialist chains, such as HMV and Virgin, times are tough. HMV recently has been able to boast a profit — if halved from the previous year — and June saw Fopp, the No. 3 chain in the market, close the doors on its remaining 50 stores. HMV subsequently picked up the brand name and six stores that it intends to run under the Fopp identity.

Specialist retailer film volume fell 5% in the first six months of the year, but there were signs of hope. After four consecutive months of decreased volume, the specialists produced their best performance of 2007 in June with volume up 18.9%, though still less than half the rate of growth seen in the overall market.

Year-to-date, specialists have seen their volume sales fall 4.2%, giving them a 32.4% market share.

The generalists, led by Woolworths and Amazon, have seen total volume rise 12.1%, just ahead of the market but behind the grocers. As a result, generalist retailers now have a market share of just more than 19%.

The wettest June weather on record also proved a boon for bricks-and-mortar rental outlets, with consumers returning to traditional rental to escape heavy rains.

Transactions rose for the first time this year, up 4.7% from a year ago. The top title for the month was "Hot Fuzz," which made 364,000 rental turns; the top title year-to-date is Entertainment in Video's "The Departed" (935,000).

The increase in rentals was driven by the demand for offline rentals through traditional stores, which saw an rise of 2.8%, the first increase of 2007.

The online part of the market continued to perform well, with transactions up 9.4%, its second-biggest rate of increase of the year. Online transactions represented 30% of the total market in June, the highest level ever.

Year-to-date, total rentals still were down — by 9.7% — though the equivalent figure in May was down 12.2%.