TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Protests break out at Eskom plants

      23 June 2022

      South Africa scraps public mask mandate

      23 June 2022

      Crypto is not too big to fail

      23 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Winter 1, Eskom 0

      22 June 2022
    • World

      Crypto crash survivors could become ‘tomorrow’s Amazons’

      23 June 2022

      Tether to launch a stablecoin tied to the British pound

      22 June 2022

      Tech giants form metaverse standards body, without Apple

      22 June 2022

      There are still unresolved matters in Twitter deal, Musk says

      21 June 2022

      5G subscriptions to top one billion in 2022: Ericsson

      21 June 2022
    • In-depth

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022

      Tulipmania meets the real economy at WhatsApp speed

      30 May 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»In-depth»What’s really killing the video store

    What’s really killing the video store

    In-depth By Craig Wilson29 June 2012
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Media group Avusa said last week that 25% of SA video stores had shut up shop in the past year. Rather than the usual culprits of piracy, video on demand and the weak economy, one major industry player is laying the blame squarely at the door of Avusa-owned Nu Metro.

    Peter Scott, a director at DVD rental chain Mr Video, says Nu Metro has “monopolised the rental industry by entering into exclusive agreements with the major studios, ensuring that the prices that video rental stores have to pay for movies … are not determined by any competition whatsoever”.

    He says Nu Metro has a stranglehold over which content makes it to the SA rental market, in the process “denying the public from a huge number of other films available”.

    But Fay Amaral, MD of entertainment at Avusa — she oversees Nu Metro Film Distribution, Nu Metro Cinemas and Nu Metro Home Entertainment — says there is a misconception that the company is the sole distributor of content to the rental market and that there are instances where the company only has the rights for DVD and Blu-ray resale and not rental, as is the case with movies from studio 20th Century Fox.

    She says there are other players in the market and potentially room for more, but the barriers to entry are high, particularly because of the distribution challenges in SA, where cities and towns are far apart.

    Though Nu Metro is by far the largest distributor to the rental market, other players include Ster-Kinekor, Next Entertainment and a handful of niche, independent distributors.

    Amaral says that the decline in video-store numbers is due to a “mixed bag of driving factors” and cannot be attributed to piracy, video on demand or economic conditions alone.

    She says services like pay-TV operator DStv’s BoxOffice, a video-on-demand service where users can rent movies via their decoders, is a factor, but its limited selection and availability (it’s only on DStv’s personal video recorders on its high-end subscription package) mean its impact isn’t big.

    However, Amaral says BoxOffice is the “catalyst for a trend”. In keeping with international markets, video on demand will become more popular as Internet connection speeds in SA increase and bandwidth prices fall.

    “There are also economic drivers to consider,” she says. “There are basic economic factors causing smaller operators to close, just as there are in other industries. The cost of running operations, from rent to electricity, is a definite contributing factor.”

    Amaral says that despite the poor economy, spending on entertainment by consumers remains positive. “Renting videos is still a cheap form of entertainment from a family point of view,” she says, adding that stores with deeper back catalogues have a better chance of differentiating themselves and continuing to perform, at least for now.

    DVD and Blu-ray sales, meanwhile, are up over the last year, though Amaral suggests this is also the result of price decreases. “As with electronics, over time the price of formats like DVD and Blu-ray inevitably come down. Again, this is in line with international trends.”

    Cinema, meanwhile, continues to perform well, with 3D content helping to keep revenue up on account of higher ticket prices. “SA has had consistent [cinema] attendance for 15 years,” she says. “Spikes happen on account of content. There’s a very loyal movie-going audience in SA that gets rejuvenated through the youth and which crosses all demographics.”

    In fact, in recessionary times, cinema attendance actually tends to go up, perhaps due to an increased demand for escapism.

    Video rentals don’t seem to be enjoying the same stability seen by the sales and cinema markets. Scott says Mr Video has experienced “some strain”, though not to the extent of a quarter of its stores being closed down. He says he believes the majority of those that have closed are independently owned stores.

    Scott won’t reveal store numbers or say how many applications Mr Video has received from prospective franchisees. Rival chain Video Spot, meanwhile, says two of its 14 stores have closed in the past 12 months. It suggests closures were kept to a minimum because of Video Spot’s extensive back catalogue.

    Video on demand is having an impact, says Scott, mainly in affluent areas where consumers have DStv Premium subscriptions. However, he says DStv BoxOffice can’t compete with rental stores on price or range of content.

    Piracy remains the primary reason video stores are closing down and government isn’t doing enough to stamp it out, despite making noises about wanting to stimulate the local film industry, Scott says.  — (c) 2012 NewsCentral Media

    • Image: Jepoirrier/Flickr
    Avusa DStv Fay Amaral Mr Video Nu Metro Peter Scott Video Spot
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleTelkom hikes DSL, line rental fees
    Next Article Auction of Vodacom DRC shares on hold

    Related Posts

    Goodbye, Internet Explorer – you really won’t be missed

    19 June 2022

    Oracle’s database dominance threatened by rise of cloud-first rivals

    13 June 2022

    DStv ‘doubles down’ on local content

    11 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Huawei P50 now available for pre-order in South Africa

    23 June 2022

    Calabrio paves way for SA’s cloud contact centre WFO journey alongside AWS

    23 June 2022

    More than card machines – iKhokha diversifies to reach more SMEs

    22 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.