Introduction

Verdict Research: UK Music & Video Retailers 2007 provides comprehensive analysis of the music & video market in the UK as consumers growing preference for digital downloads cuts demand for CDs. The report looks at the dynamics, growth trends and drivers, key indicators and profiles the top operators in the market including Asda, HMV, iTunes, Tesco, Virgin (Zavvi), and Woolworths.

Scope

Market size, inflation, sales, space and store numbers, 1997-2007. Includes category sales and forecasts to 2012. Sales through distribution channels including specialists, non-specialists, pureplay online retailers and grocers, and share of music & video spend. Analysis and strategic recommendations for key retailers, with market shares, store profile statistics and sales densities for 2002-2007.

Highlights

Following a highly challenging 2005, trading conditions for music & video retailers deteriorated further in 2006. The continued pressures of price deflation and weakening underlying demand for CDs and DVDs caused the market's value to fall by 7.6% over the year making it the worst performing sector by a considerable margin. While piracy will continue and CD volumes will decline further, most retailers are better placed to cope with market challenges. Many weaker players have fallen from the market, market leader HMV has invested heavily in its online offer and upgrading its store estate, and digital downloading is starting to pick up pace and has much potential. In the short term we expect next generation DVD will help stabilise the market. Though HD-DVD and Blu-ray are unlikely to cause a massive surge in sales to the extent DVD did when they hit the mass market, they will provide a stimulus, as hardware and software prices fall to mass market levels and more titles become available.

Reasons to Purchase

Assess the market's dynamics through robust, exclusive market share and market size data. Identify the growth prospects with detailed analysis of the key issues and drivers of the market. Understand each retailer's store portfolio, retail proposition and future outlook.

TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 11
Key Findings 11
Main Conclusions 12
CHAPTER 2 MARKET ANALYSIS 16
Overview 16
Music 17
Video 20
Music & Video Specialists Sales 22
Specialists Stores 24
Specialists Space 25
Specialists Density 27
Channels of Distribution 28
CHAPTER 3 COMPANY DATA ANALYSIS 30
Operating Statistics 30
Music & Video Market Shares 31
Music Market Shares 33
Video Market Shares 34
Space Productivity 35
Advertising 36
CHAPTER 4 KEY ISSUES 38
Piracy and Illegal Digital Downloading 38
Next Generation DVD 39
Market Shake-out 40
Specialist Diversification 40
New Era of Music & Video Retailing 41
Digital Downloading 41
DRM-free Downloading 43
Increasing Popularity of User Generated Content 44
Streaming and Podcasting 44
Appeal to Multi-generations 45
Multichannel Imperative 46
CHAPTER 5 OUTLOOK 47
Overview 47
Music Forecast 49
Video Forecast 50
Channels of Distribution Forecast 52
CHAPTER 6 ASDA 54
Company Overview 54
Market Shares 56
Trading Performance 57
Store Portfolio 58
Outlook 60
CHAPTER 7 BLOCKBUSTER 61
Company Overview 61
Market Shares 63
Trading Performance 64
Store Portfolio 64
Outlook 66
CHAPTER 8 HMV 67
Company Overview 67
Market Shares 69
Trading Performance 70
Store Portfolio 71
Outlook 73
CHAPTER 9 ONLINE MUSIC & VIDEO RETAILERS 75
Company Overviews 75
Amazon 76
Apple iTunes 77
CD WOW! 77
Play.com 78
Market Shares 78
Outlooks 80
Amazon 80
Apple/iTunes 81
CD WOW! 81
Play.com 82
CHAPTER 10 SAINSBURY 83
Company Overview 83
Market Shares 85
Trading Performance 86
Store Portfolio 86
Outlook 88
CHAPTER 11 TESCO 89
Company Overview 89
Market Shares 91
Trading Performance 92
Store Portfolio 93
Outlook 94
CHAPTER 12 WH SMITH 95
Company Overview 95
Market Shares 96
Trading Performance 97
Store Portfolio 98
Outlook 98
CHAPTER 13 WOOLWORTHS 99
Company Overview 99
Market Shares 101
Trading Performance 102
Store Portfolio 102
Outlook 103
CHAPTER 14 ZAVVI (FORMERLY VIRGIN MEGASTORES) 104
Company Overview 104
Market Shares 106
Trading Performance 107
Store Portfolio 108
Outlook 109
CHAPTER 15 GLOSSARY 110
Financial Statistics – VAT 110
Trading Profile 110
Physical Development 110
Abbreviations 111

LIST OF TABLES
Table 1: Total music & video market size 1997-2007e 16
Table 2: Music market size 1997-2007e 17
Table 3: Video market size 1997-2007e 20
Table 4: Music & video specialists sales 1997-2007e 22
Table 5: Average store size for music & video specialists 1997-2007e 26
Table 6: Music & video channels of distribution 2002 & 2007e 28
Table 7: Leading companies key operating statistics 2006/07 30
Table 8: Music & video retailers market shares 2002-2007e 32
Table 9: Music & video retailers music market shares 2002-2007e 33
Table 10: Music & video retailers video market shares 2002-2007e 34
Table 11: Total music & video market size 2002-2012 47
Table 12: Total music market size 2002-2012 49
Table 13: Total video market size 2002-2012 50
Table 14: Music & video channel shares 2002, 2007e & 2012e 52
Table 15: Asda company overview 2007 54
Table 16: Asda key operating statistics 2001-2006e 55
Table 17: Blockbuster company overview 2007 61
Table 18: Blockbuster key operating statistics 2001-2006e 62
Table 19: HMV company overview 2007 67
Table 20: HMV UK & Ireland key operating statistics 2002-2007 68
Table 21: Online music & video retailers company overviews 2007 75
Table 22: Online specialists estimated share of music & video 2007 78
Table 23: Sainsbury company overview 2007 83
Table 24: Sainsbury key operating statistics 2002-2007 84
Table 25: Tesco company overview 2007 89
Table 26: Tesco key operating statistics 2002-2007 90
Table 27: WH Smith company overview 2007 95
Table 28: WH Smith key operating statistics 2001-2007e 96
Table 29: Woolworths company overview 2007 99
Table 30: Woolworths key operating statistics 2002-2007 100
Table 31: Zavvi company overview 2007 104
Table 32: Virgin Megastores key operating statistics 2002-2007 105


LIST OF FIGURES
Figure 1: Music & video specialists store numbers 1997-2007e 24
Figure 2: Space growth for music & video specialists 1997-2007e 25
Figure 3: Music & video specialists sales densities at current prices 1997-2007e 27
Figure 4: Estimates of companies sales per sq ft 2006/07 35
Figure 5: Advertising spend 2006 36
Figure 6: Advertising spend 2006 % of sales 2006/07 37
Figure 7: Digital downloading market forecast 2004-2012 41
Figure 8: Digital downloading as % of the music & video market 2004-2012 42
Figure 9: Music and video shares of the market 2002-2012 51
Figure 10: Music & video channels market share change 2002-2012 52
Figure 11: Asda music & video shares 1998-2007e 56
Figure 12: Blockbuster music & video shares 1998-2007e 63
Figure 13: HMV music & video shares 1998-2007e 69
Figure 14: Sainsbury music & video shares 1998-2007e 85
Figure 15: Tesco music & video shares 1998-2007e 91
Figure 16: WH Smith music & video shares 1998-2007e 96
Figure 17: Woolworths music & video shares 1998-2007e 101
Figure 18: Virgin Megastores music & video shares 1998-2007e 106