Thursday, November 12, 2009

BIG RISE IN PIRACY, ILLEGAL DOWNLOADS HITS DVD-MAKERS

       Manufacturers of home-entertainment products, especially DVD movies, have been hit by a huge increase in piracy during the recession.
       Home-entertainment products are normally assumed to enjoy higher sales during a downturn, as consumers spend more time indoors and enjoy online games and DVDs and VCDs.
       However, Oraphan Monphichit Pavaravadhana, vice president - acquisition and distribution at Rose Media & Entertainment, said the company's sales of VCD and DVD movies are expected to drop by between 60 and 70 per cent this year, due to economic factors and continuous piracy problems, including the increased availability of pirated VCDs and DVDs and a jump in illegal downloads.
       Rose Media's sales of cartoon VCDs and DVDs are expected to decline by at least 50 per cent this year, she said.
       "Young people are now addicted to TV and computer screens and mobile telephones. They can stay at home and download movie content immediately, and with good picture quality," said Oraphan.
       She added that the company expected the contribution from VCD and DVD products to decline gradually and be replaced by such digital services as mobile streaming, Internet Protocol TV (iPTV), video-on-demand and pay-per-view services.
       She said Rose Media had recently launched mobile streaming of its "Gang Cartoon" content in cooperation with Advanced Info Service.
       The company has also launched a 24-hour Gang Cartoon satellite-TV channel.
       "What we have to do right now is to build our Gang Cartoon brand and promote loyalty to the brand, which is created especially for all cartoon lovers," said Oraphan.
       "We are also discussing with many partners new business opportunities to deliver our enriched movie and cartoon content via new digital media channels such as iPTV and video-on-demand."
       She said the company expected the sales contribution from physical VCD and DVD products to drop gradually from the current 60-70 per cent to less than 20 per cent in the next two to three years.
       This follows the trend in other markets such as Hong Kong, Singapore, Japan and Taiwan, where home-entertainment industries have been dominated by new digital media. Rose Media expects to achieve about Bt600 million in sales this year.
       Krit Sakulpanich, managing director of Dream Express, which has the local broadcasting and distribution rights for many well-known animations and super-hero TV series from Japan, said the company's sales of VCDs had dropped by 30 per cent from the same period last year. Nine-month DVD sales remained stagnant.
       "During the economic difficulties, we have seen a larger number of illegal downloads of our cartoon and TV-series content. As well, the number of pirated VCD and DVD products has increased dramatically in such locations as Klong Thom, Sapanlek, Ban Mo and Seacon Square," said Krit.
       He said some pirated DVDs - with five movies on one disc - were now available on the black market at just Bt50 to Bt100 each.
       "What we have to do to fight the piracy is to reshuffle ourselves by adding other new products, such as apparel and accessories, into our portfolio," he said.
       Krit said Dream Express would launch 10 new licensed animations and super-hero TV series from Japan next year. They include "Gundam Double O", "Ultraman Mebius", "Phone Braver 7", "Bakugan New Vestroia", "Mask Rider Kiva", "The Salads World" and "Pretty Cure 3".
       Sakeson Thammawon, general manager of Dream Apparel, a wholly owned unit of Dream Express set up for the sale of licensed clothing tied in to animation and super-hero TV series, said the company would next year open its own sales counters at leading department stores.
       The company's apparel and accessory products are now selling via wholesale and hypermarket channels.
       "We plan to double the number of stock-keeping units for our apparel and accessory products next year. There are currently more than 100 SKUs in our apparel and accessories portfolio," said Sakeson.
       Dream Apparel expects to achieve Bt40 million in sales this year, which will contribute 20 per cent of Dream Express's overall sales. The company expects clothing sales to grow by almost 50 per cent next year.
       Dream Express expects its sales to reach Bt200 million this year, which is about the same as last year.

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