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

UK FILM COUNCIL
The impact of BSkyB’s approach is likely to have a stifling effect on the immediate development of the a la carte Internet VoD market in
the UK – given the platform’s scope and access to content. However, with studios now proactively encouraging the open Internet as a
viable distribution platform, there will be a replication of existing TV models by 2006 – that is, titles with the earlier PPV window finding
an audience seeking newer titles, but not quite reaching the value of the pay-TV deals.
Added to the equation are Apple and Sony, who are currently offering video downloads via iTunes to the iPod (worldwide) and
SonyConnect to PSPs (in Japan only). Apple is likely to quickly expand its premium content offering out of the US, whilst Sony is planning
to translate its model to the UK and Europe in 2006, offering approximately 500 titles for PPV download, and, as suspected, for ‘digital
sell-through’. The latter is a model which a number of other studios, including Disney and Warner Bros, are also seeking to exploit in the
longer term. The digital retail model might eventually debut simultaneously with DVD retail, and, as such, marry the profitable margins of
retail and on-demand delivery in one proposition. The key technical issue to be resolved yet is how to allow for download-to-burn rights
whilst retaining copy protection on the home-made DVD. Other service providers to watch include ISPs AOL (which is expected to launch
services independently with Warner Bros and possibly in conjunction with an online DVD rentailer), and search engines Yahoo! and
Google – both of which are in the early years of ambitious content distribution plans. As the situation stands, the first digital sell-through
offers should appear in the UK in 2006 and are likely to drive the market into 2010.
UK: A la carte movie download and streaming forecast 1
2003 2004 2005 2006 2007 2008 2009 2010
Downloads/streams per year 000s 0.9 0.9 9.5 775.9 2,205.7 7,348.0 19,826.9 48,505.6
Annual change in downloads/streams % 108.7 529.2 6,851.2 280.2 245.5 191.7 160.8
Share of European total % 0.8 0.2 0.9 16.7 13.6 18.6 24.4 31.2
Buy rate 2
Source: Screen Digest
Notes
1
does not include content downloaded or streamed within a subscription
service
2
buy rate is average number of downloads per broadband household during the year
0.00 0.00 0.00 0.06 0.15 0.44 1.09 2.51
To this end, Screen Digest predicts that by 2009, the equivalent of every UK broadband household will have downloaded or streamed at
least one paid-for movie from the Internet, whether a la carte rental or a digital purchase. Adding subscription revenues, this would
generate just under £80m per year in mostly additional revenues for the movie industry, surpassing £200m by 2010 – although some
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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