The online market for films is dysfunctional

Open Rights Group today published research on the availability of film online, finding a dysfunctional marketplace that leaves consumers with the digital equivalent of empty shelves. The findings showed:

• Excluding iTunes, only 27% of the BAFTA Best Film award winning films from 1960 to 2011 are available to rent or buy online, with only 29% of the50 best British films.
• Only 6% of the best 50 best British films are on Film4 OD or Virgin Media. 14% are available through a LoveFilm subscription and 4% through payper view on LoveFilm.
• Including iTunes, still only 43% of the top 50 British films can be bought or rented online, with the figure at 58% for the BAFTA Best Filmaward winners.

As well as problems with availability, prices online do not compare favourably with DVDs:

• For the best selling DVDs from August 2011, the average price onAmazon.co.uk was £6.80. For iTunes purchases, of the films available through its service, the average price was £8.88. For blinkbox purchases theprice stood at £9.49.
• DVD prices at Amazon.co.uk for the BAFTA winning films average at£5.84, whilst on iTunes the average price stands at £6.72

In the US, DVD sales fell 20% in the first quarter of 2011. Presuming a decline in physical media sales, shifts towards digital consumption and device 'convergence', the availability of a broad digital catalogue of works at least comparable to that available on physical media will be vital in sustaining a bouyant film industry.

If the goal for policy makers is cultural markets that thrive in the digital age, consumers' demand must be satisfied online. Clearly this is not yet happening. This must take precedence over damaging new copyright enforcement measures. The proportionality and necessity of enforcement can only be considered in a situation in which there is a compelling offering of legal services and a healthy market environment.

Peter Bradwell, campaigner at Open Rights Group, said:

"There are obvious deficiencies in the licensing for cultural goods online. This is crippling the market just as consumers are increasingly showing a desire to watch film in new ways. Consumers are moving online faster than the industry whose films they want to watch. Understanding why these market sare so unhealthy must be a key focus for policy makers."

Notes on the results

The four film lists used:

1. The top 50 films from Time Out London magazine's 100 Best BritishFilms2. BAFTA Best Film award winners (1960-2011)3. Amazon.co.uk's 20 best-selling DVDs as of 1 July 20114. Amazon.co.uk's 40 best-selling DVDs for August 2011

For each film, we searched five content providers (iTunes, Lovefilm,blinkbox, Film4 OD, and Virgin Media) and one film listing service (Findanyfilm). Box-sets and TV shows were excluded from the comparison ofthe Amazon.co.uk lists. For the recent best sellers lists, we included HD results.

Results were correct as on 19th September 2011. The results for any givensearch frequently change, with content providers' catalogues changing offers. Results here should therefore be taken as *indicative* of current availability. You can download the spreadsheets with more detailed comparisons in here (.xls).