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Downloads and DVDs to revive flagging sector

Declining music and video industry to get boost

 

Man wearing headphones

Sales of next-generation DVDs and digital downloads are set to boost the beleaguered music and video retail sector, industry analysts are predicting.

A new report out today says the flagging sector will shrink once again in 2007 – for the third year running – while the number of CDs sold will continue to fall.

But Verdict Research says that that downloading – which has seen a 45.5 per cent growth this year – will continue to soar in popularity, with spending expected to hit £600 million by 2012.

It predicts that iTunes’ dominance of the download market will be challenged by new entrants- such as Nokia and Amazon  – while enhanced services from HMV, Tesco and Woolworths will also boost their popularity.

HD DVD and Blu-ray

Verdict Research also believes that HD DVD and Blu-ray – the next generation DVD – will boost the music & video market.

Nick Gladding, Lead Analyst at Verdict, said: ‘As hardware and software prices fall to mass market levels and more titles become available, sales will start to rise faster. 

‘For many consumers that have bought an HD-ready TV over recent years, next generation DVD will be the first opportunity to test their new equipment’s full abilities.’

The last 12 months have seen the collapse of high-street CD and DVD chains Music Zone and Fopp, as well as the closure of many independent stores.

HMV and Virgin

Verdict Research says the remaining companies – such as HMV and Virgin – are adapting to overcome market challenges. 

It says that HMV is developing better stores and a better website, while Virgin, whose stores are now being rebranded Zavvi, should emerge a stronger retailer after closing its loss-making stores.