PEVE 2014: Euro content retail market at inflexion says Sony chief
| 30 September 2014
In at times a hard hitting speech to media operators and content owners, Sony executive Man Jit Singh has warned that the future of Europe's home entertainment market hangs in the balance.
Delivering the opening keynote at PEVE Entertainment Business Futures 2014, the president of Sony Pictures Home Entertainment said that the industry was balanced between US-style profitability or a Nordic market that he described as being hit by a perfect storm which has led to revenues falling sharply.
Overall Singh expressed confidence in a market in which consumer demand for content had never been higher, with average consumption 17 hours greater than in the first quarter of 2007 when Netflix first began streaming content. Yet given this demand, driven by a proliferation of devices, Singh was concerned that with the great level of content consumption there was a danger of 'maxing out' on the amount of entertainment that could be consumed leading to an inability for the market to grow.
Yet cautioning the audience he produced data showing that global home entertainment revenues had actually begun to decline with the uptake of subscription VOD services such as Netflix and electronic rentals damaging traditional and formerly very profitable sell through business models.
Yet of even more concern he revealed that the European marketplace, like that of Asia, was suffering from piracy which he described as "particularly worrying" when compared with the situation in the US. "This impacts all of us," he added.
Singh singled out the Nordic region for particular attention, a region he said was suffering from a perfect storm of market conditions, including piracy, which had contributed to a 30% decline in revenues. "Retailers did not have a clear succession to digital [channels], consumers did not see value and SVOD eroded retail," he commented. By contrast, he turned to the US where market decline had flattened out and electronic sell through (EST) was an opportunity for the likes of cable operators. In addition partnerships between the key players in the ecosystem were mitigating against piracy.
In a call to action as Europe was at the inflexion point between a US- or Nordic-based model, Singh suggested that there were three things that European players needed to do to drive consumer value in their propositions: quality, value and convenience.