Germany: Video market continues to decline

GfK Retail and Technology – Germany, Consumer Electronics

The Video market in Germany has continued to record negative results, declining by 11.8% in units in 2011.

The robust sales figures experienced by Blu-ray players (30.5%) was not enough to rescue the drop in demand for traditional DVD players – these products still sell almost double the amount of Blu-ray models.

On the other hand, home cinema systems performed relatively well – there was a strong demand for systems with Blu-ray playback (+91% in units). This led to a slight increase in total turnover (2.9%). These devices now account for half of all products sold in this market.

Both markets witnessed rapid price decreases, especially with regards to Blu-ray playback devices, and standalone Blue-ray player/recorders fell by 23.9% in July when compared to the same period of last year. The price decline of Blu-ray home systems was not as severe (-18.3%). It is worth noting that the features of these appliances have been constantly improving.

Tendency towards 3D continues

In July, 58% of all Blu-ray player/recorders sold were 3D enabled; this figure reached 68% in the home cinema systems market. Nevertheless, the sales of 3D players are still behind those of 3D TVs, meaning there is still a lot of cross-selling potential for retailers.

Blu-ray: Strong growth in players with hard-disks and stable performance by home cinema

The majority of sold Blu-ray players are still without hard-disk and record functions. Whereas recorders grew by 90%, the amount of sold appliances with hard-disks is considerably more – they increased fourfold. The share of home cinema systems remains stable.

Blu-ray and home cinema systems to become smarter

Smart TV was one of the hot topics at IFA this year – but only the newest generation of TV’s are equipped with network capabilities and access to the internet. This poses the question, what will happen to the 28 million conventional flat screens TV’s which have been sold for the last 5 years and are still on the shelves?

This opens the door to the possibility of “upgraders” – this can either be a separate box or a Blu-ray player or new home cinema system. Hence in July, 77% of Blu-ray players and home cinema systems sold were equipped with internet access, usually with a portal from the manufacturer.

Another important issue is the integration of older TV sets into the home network in order to stream movies or music from the laptop/PC or smartphone; Blu-ray players and home cinema systems play a key role here. In July, 67% of Blu-ray players and 72% of home cinema systems sold supported the streaming standard DLNA.

Despite all the euphoria manufacturers spread about Smart TV’s, the question as to whether consumers make use of the new opportunities is still left open. The latest Smart TV survey from GfK shows only a smart percentage of consumers with these products use streaming features regularly.

Manufacturers must now work harder to ensure there is added value and fun for the consumer – new portals and Apps which undoubtedly help this.