The French video distributors' association(SEV) yesterday sounded the alarm, reporting that the home entertainment marketin France has dropped dramatically.

The combined DVD and VHS retail marketretreated by 16% in cash terms, according to the SEV when the first quarter of2004 was compared with the same period of last year. The rental market, whichhas always been significantly smaller in France, dropped by an even larger 22%.

The SEV said: It is likely that what we areseeing are the first demonstration of the rapidly growing online piracy problemwhich is now affecting the sector."

Like most Western markets, France's DVD boomhad previously helped the country's home entertainment sector to expand,although growth in 2003 had been at a lower rate than in 2002.

In February the SEV reported that the homeentertainment market had grown by 12% to hit Euros 1.2bn. In unit terms thenumber of DVDs shipped leaped 55% from 49 million in 2002 to 76 million, whileVHS copies shrank from 33 million to 23 million. Rental market units were down10% to 2.3 million.