On-Demand Market to Hit $1.1 Bil. by ’12, Study Says

LONDON On-demand media — taking in video and television services — could help replace falling DVD sales revenues and bolster incremental cash streams, according to the latest report published here Wednesday.

The research, published by U.K.-based specialist Screen Digest, predicts the on-demand sector will generate $33 million in incremental spending this year in the U.S. and the major European markets, and be worth $1.1 billion in consumer spending by 2012.

Crucially, two-thirds or $665 million of this amount will be new revenue, while the remainder will replace traditional DVD spending, the report says.

With the video business approaching the saturation point in many markets and online retailers struggling to accommodate an ever-expanding DVD catalog, on-demand media will provide a growing outlet.

On-demand services are expected to enable retailers to offer a huge range of titles “without the constraints associated with the traditional video supply chain,” the report says.

Screen Digest analyst and research author Marie Bloomfield said: “The industry has an opportunity to establish a viable ODM business, both in-store and online. Retailers, rights holders and consumers can all benefit from the on-demand retailing of a wide range of video content, and overall the industry has the potential to reap significant financial value from a well-executed ODM strategy. This is particularly crucial as the growth in the DVD business has plateaued and the new content made available to consumers will generate incremental revenue which will help sustain the market.”