A polarisation isthreatening to disrupt the UK DVD and video sector, according Alison Casey,head of content division at market researchers Understanding & Solutions.
Speaking at ScreenInternational's DVD: The Home Cinema Summit, Casey warned that the UK'shigh street and internet retail and rental business faces a shake-up in whichthe middle ground could disappear. Casey and other speakers on the HighStreet Hollywood panel, which looked at routes to the market, highlightedthe difficulties facing generalist outlets such as Woolworths and W H Smith inthe face of pressure from specialist outlets and, at the other end of thespectrum, supermarkets.
"In the UK until now we havebeen lucky in that there is a very balanced relationship distribution structure,"said Casey. "[But] there is a potential that we will lose the middle ground."
One would-be competitor,Silverscreen co-ceo Sebastian James, said that his start-up chain of specialistvideo stores would reach 45 outlets by Christmas, having been launch asrecently as last August.
The growth of on-linesuppliers was also represented on the panel. Mark Livingstone, chief executiveof Lovefilm.com, noted that 84% of his stock on a weekly basis was backcatalogue, while Video Island ceo Saul Klein added that his company had dealswith mainst ream suppliers such as supermarket Tesco.
One major talking point ofthe panel, which was moderated by Jose Riera, senior news reporter at RetailWeek, was the imminent arrival of US online behemoth Netflix in the UK.
"We hate them, obviously,"quipped James. "And we're afraid them of like any school bully."
But not all the panellistswere quaking with fear. Livingstone pointed out that Video Island had just raised$11m, while Netflix's commitment to market entry is reportedly $7.5m. AlexSparks, UK managing director of Blockbuster, noted the lack of competitionNetflix faced in the US compared to the UK, where several players are alreadyestablished.
"It's dangerous to assumethat everything that happened in the US will happen in the UK," said Sparks.