This reciprocal deal between Paramount and Universal is designed to reduce costs and drive further economies of scale. This is particularly relevant to Italy, a market which, like Spain, has been heavily impacted by online video piracy and competition from other in-home entertainment platforms. The different handover dates in Spain and Italy will have allowed both studios to fully leverage their Q4 slates.
These are uncertain times for the Italian video market, which experienced declines in consumer spending on retail physical video of 14.2% in 2008 and 10.2% in 2009. Results for 2010 may have offered some breathing space; IHS Screen Digest preliminary data shows that total retail spend declined by just 3.1% in 2010. However, should Italy's video market performance not continue to improve over 2011 other studios may follow suit.