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Press Coverage
Demand dips for online films
01-Mar-10
Source: Financial Times
Hollywood's hopes for a future built on digital film downloads have been severely undermined by research showing cooling consumer demand for movies online.
The film industry was banking on digital distribution eventually replacing the income it generates from sales of DVDs, which have been in steep decline for the past two years. But while sales of digital films rose sharply in 2007 and 2008 growth stuttered in 2009, according to a report by Screen Digest.
The media research group had forecast total online movie sales in the US of $360m (Euros 264m) for 2009, based on the sharp growth of 2007 and a near doubling of sales in 2008 to $219m. Yet after a slowdown in the second half of the year, US revenues for 2009 were substantially lower than forecast at $291m.
"The market just cooled off," said Arash Amel, a research director with Screen Digest. "This wasn't caused by economic factors . . . the level of interest in digital downloads just isn't there."
He believes consumers have been deterred by an array of competing online platforms that prevent viewers from watching digitally downloaded films on the devices of their choice. A consumer buying a film from Apple's iTunes store is unable to watch it on their Microsoft Xbox console, for example.
"Digital downloading is characterised by its restrictions – it's all about what viewers can't do, rather than what they can do," added Mr Amel.
Hollywood has moved to address problems associated with digital distribution yet the industry is divided on the best way forward.
Walt Disney has created Keychest, which it describes as "enabling technology" that allows consumers to buy a film once and watch it anywhere.
But the rest of the industry is supporting the rival Digital Entertainment Content Ecosystem coalition, which is backed by Sony Pictures.
With no immediate solution in sight, the Screen Digest report is likely to make grim reading in Hollywood.
The private equity and hedge fund money that poured into the industry fuelling a production boom has evaporated following the financial crisis, leaving the studios desperate for new revenue sources.
Studios have made efforts to cut the pay offered to top stars while the number of films going into production in 2009 fell almost 20 per cent to 520 and is forecast to fall again this year. Screen Digest has slashed its growth forecasts for digital film sales by 30 per cent after the smaller-than-expected rise last year.
U.K. Tightens Rules on Newly Approved TV Product Placement
14-Feb-10
Source: Advertising Age
Struggling U.K. commercial broadcasters breathed a sigh of relief in September, when regulators officially sanctioned product placement.
But now the sigh has become one of frustration. Regulators have recently announced that junk food and alcohol are excluded from the new rules, banning many potentially lucrative placement deals with household-name brands, which are also among the most sophisticated marketers.
"It doesn't come as a surprise that product placement will be tightly regulated," said Daniel Knapp, an analyst at Screen Digest. "We can see that from the heated public debate -- on the one side, broadcasters who are desperate to stay afloat, and on the other side, consumers wary of the looming epidemic of obesity and alcoholism -- the government, as a mediator, had to find a compromise. Here it will be modest, and not as 'in your face' as it is in the U.S."
British consumers are notoriously squeamish about product placement. Brought up on the noncommercial BBC, they are convinced that brands want to sabotage their favorite shows with inappropriate and intrusive appearances that detract from the plotline and turn everything into a hard sell. They are comfortable with watching fake brands and pixelated logos if they help to keep commercialism at bay.
Even marketers aren't convinced by product placement, preferring the informal "prop placement" system currently in place. Their trade body, the Incorporated Society of British Advertisers, argues that paid-for product placement would lead to the double disadvantage of higher costs for advertisers and more complaints from the viewing public.
"Prop placement" is effectively unpaid product placement, but with the restriction that brands may not be given "undue prominence" in a show. Most of this is done through agencies, which make their money by charging fees to marketers, but aren't allowed to charge program makers for anything beyond transportation or nominal rental costs.
Mr. Knapp estimates that -- with the junk food and alcohol restrictions in place, and the diversion of funds away from advertising and into product placement -- product placement will bring in no more than $95 million a year to the U.K. commercial-TV broadcasters, which include cable and satellite channels as well as free-to-air broadcasters such as ITV and Channel 4.
US media firms present "multi-faceted" competition
12-Feb-10
Source: Gamesindustry.biz
Following the publishing of a report on the threat posed to traditional publishers by media giants such as Disney, Warner Bros and Viacom entering the games space, Screen Digest analyst Piers Harding-Rolls has said that these American companies spell "multi-faceted" competition for the industry.
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