Feasibility Study of a Digital Platform for the delivery of UK ... - BFI

UK FILM COUNCIL
Several of the mainstream films add 10 per cent to their traditional rental transaction by virtue of the online marketplace, and around 40
per cent of them add at least five per cent through the new distribution outlets. The average ratio between online rental and traditional
rental for this group of films is 3.9 per cent, significantly higher than the theatrical ratio.
However, the top 25 UK and specialised films are still performing better than them in relative terms. Around 30 per cent of this group
have passed the 10 per cent mark, and one even achieved higher transaction numbers in online rental than it did in traditional (a ratio of
over 100 per cent). The average ratio of online to traditional transaction for this group of films is 10.5 per cent. The crude measure of
‘uplift’ compared with the traditional rental performance is around 2.5.
But this ratio has been understated by one very important characteristic of the traditional rental market discussed earlier in this chapter.
Many of the UK and specialised films are not getting a viable bricks and mortar rental release, and these films have been omitted from
the chart. About a third of the top 25 films in 2003 and 2004 do not have any revenue in the rental window according to the MRIB data,
and yet are generating income in the online platforms. For these films, the ratio is infinity, as is the notional uplift. Although they are
generating additional revenue for the UK and specialised sector, this revenue is effectively ignored by this form of analysis.
The issue of titles failing to generate any revenues is far less
important in the video retail market, where only four of the 50 top UK
and specialised titles did not generate sales according to OCC data.
The ratios for the top mainstream films look remarkably similar in
retail as in rental, with three or four titles breaking through the 10
per cent mark. And indeed, the average ratio itself is also very similar
at 3.6 per cent (3.9 per cent in rental). The performance of these
films in online rental is the same whichever traditional video window
you compare it with.
But the UK and specialised film group are showing a spectacular uplift
in the online rental market compared with video retail (see graphic
on next page). Five films have scored higher transactions in the
online rental space than they sold units in bricks and mortar shops,
three of which transacted two or three times the number. Only a
handful of these films transacted less than five per cent of the
number of units sold through to consumers.
The average ratio between online rental and retail for the UK and
30%
25%
20%
15%
10%
5%
0%
Ratio of online rentals to traditional rentals for films
released in 2003 and 2004
Feasibility Study for a Digital Platform for the delivery of Independent UK films and Specialised films to the Home
UK Film Council © 2006
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