Decline of the DVD market in France - Studio Canal

Résumé du document

"Piracy is killing the cinema industry". This sentence has been very popular over the last years. There is no doubt that piracy has become a major issue in the cinema industry however it is not the only one causing the problem. High prices, apparition of new supports (Video On Demand),highlight the lack of adaptability of certain firms on the market. With the creation of a VOD offer, Studio Canal has quickly understood the potential of this new support. But this service has a lot of weaknesses which needs immediate attention. As a major player in the French cinema industry, Studio Canal has to find a solution to such problems in order to adapt itself to the market changes. For the moment, the number of movie entrances in France remains stable. In fact, it is the video market which is mostly touched by this phenomenon and this report focuses particularly on the video branch of Studio Canal.

Extraits

[...] The recent boom of the Internet has brought a new competitor to the cinema industry. b. A new phenomenon: the piracy For people who are not familiar with piracy yet, this phenomenon appeared with the growth of the Internet and is closely linked to it. Today a film could be downloaded in three or four hours for free. Piracy points Films, music, or software, which are downloaded illegally through networking programs on the Internet called . Indeed, it is a system which permits to share its files with someone else on the Internet. [...]

[...] In 2006, the market's turnover dropped by Yet, Studio Canal resists to this phenomenon. In 2005, the turnover of the DVD branch remains the same. In 2006, Studio Canal suffered from this decrease. Its turnover dropped by 7%. The following part will present the reasons of the current crisis and it will also describe the propositions made to help Studio Canal to deal with this problem The causes and solutions to the crisis a. The reasons of this crisis If piracy appears as the main cause of the crisis faced by the DVD market, it is not the only one. [...]

[...] That is why this report is just concerning the video branch of Studio Canal. In the first part of the report, this phenomenon will be presented and a parallel will be drawn between this current issue and the former crisis the industry has known. The second part will focus on the decisions that should be made by Studio Canal in order to take advantage of the situation The industry's overview a. A feeling of déjà vu The rise of piracy since the beginning of the 21st century could be compared to two others phenomena that happened last century. [...]

[...] In this case, the cinema industry handled the apparition of a big competitor by adapting its business model to the market's transformation. Instead of being a competitor, television became an ally. But a new competitor quickly appeared. The video exploitation After they have solved this problem, the cinema industry was faced to a new problem: the development of the video exploitation. This new support was a new serious competitor for the cinema industry. In 1993, household expenses for videos passed expenses for the cinema. [...]

[...] As we have seen in the first part, in 2006 Studio Canal has earned 280 million euros. It is still a good amount of money and this market should not disappear in the following years. Indeed, the DVD industry has a main advantage on the VOD market: it is a tangible good. Even if you can copy a movie downloaded on a VOD provider the result will not be as good as a DVD. DVD also provides additional features such as other languages or subtitles, bonuses, and so forth. [...]