Feb 25 2020
According to Westpac’s Consumer Sentiment Index, consumer confidence significantly fell toward the end of 2019. The tightening of Australian household spending and diminishing discretionary income have reduced expenditure on home entertainment. Video Ezy Australasia Pty Limited holds the largest market share in the Video and DVD Hire Outlets industry, at 38.6%. However, the company has not been immune to the decline of the industry. Video Ezy’s revenue is expected to decline by 5.8% in 2019-20, to $30.9 million. The company’s main competitor, The Network Entertainment Group Pty Ltd, holds a market share of 8.8%. Network Video’s revenue is expected to plummet by 46.2% in 2019-20, to $7.0 million. To reduce costs, industry firms are increasingly focusing on kiosks. Video Ezy aims to accumulate 4000 kiosks. After acquiring Hoyts’ DVD rental kiosk business, Video Ezy now has just over 1500 kiosks. In addition, the company has plans to expand their subsidiary, Evolve Entertainment Pty. While kiosks have benefited the industry by removing the hassle of overheads and wages, consumers can no longer expect to receive traditional customer service, including expert advice, along with their rentals.
Disney Plus, owned by The Walt Disney Company, has stormed the market. Some of the most popular titles, including many nostalgic movies, are exclusive to the streaming service. The Walt Disney Company (Australia) has recorded revenue of $504 million for 2018-19. Company revenue is expected to rise in 2019-20, as Disney Plus arrived late to Australia. The service can be streamed through many platforms, including smart TVs, phones, tablets and gaming consoles. The portability of the service, combined with a small monthly fee, and access to classic and current movies and TV shows, has likely encouraged many customers to switch.
The industry’s decline has been accelerated by the announcement of YouTube TV, which was released in the United States earlier this year. YouTube TV has been fiercely competing with cable companies and other media providers, charging ahead with more channels and accessibility features at a lower cost. This service is anticipated to be available in Australia soon. For now, it can only be accessed using a VPN. The greater selection, functionality and portability of these streaming services broadens the gap between outlets and online services. The culture shift toward streaming platforms, particularly led by younger consumers, has significantly hindered the Video and DVD Hire Outlets industry. Industry firms now mainly rely on older consumers to use their stores and services.
DVD technology itself is on the verge of becoming obsolete. Most new laptops come without a CD/DVD drive. Many desktop computers are the same, incurring an extra eripheral cost if a CD/DVD drive is required. Improvements in portable storage and cloud-based services have increased the space available to store media. In addition, some streaming services, such as Disney Plus, allow consumers to download shows to watch offline, reducing their dependence on internet access. Gone are the days of overdue fees and DVD drop boxes. With just a small monthly payment, consumers now have access to a plethora of movies and TV shows on demand.
For a printable PDF of this release, click here.