(20 March 2008 2:00 pm)

MUMBAI: The DVD business is approaching saturation point in key markets, like the US, with the release of thousands of new titles every year resulting in intense pressure on shelf space for brick-and-mortar retailers.

Even for online retailers, the sheer volume of titles available is putting the supply chain under strain.

A report from Screen Digest notes that for retailers, the issue of how to reconcile the ever-expanding DVD catalogue with intense pressure on shelf space is becoming increasingly urgent.

Meanwhile, for rights holders, there is growing concern that only the most popular titles can secure shelf space. Proponents of on-demand media (ODM) argue that this technology has the potential to address these problems.

The ODM market will initially be focussed on 'long tail' content as rights holders move to exploit niche titles not considered commercially viable in the traditional DVD supply chain.

As the number of participating rights holders and retailers increases, the ODM market has the potential to expand to include more mainstream content.

Transactions through online ODM (e-tail solutions) will grow faster than in-store ODM (brick-and-mortar retail solutions) because the method of manufacturing is invisible to consumers so will not require them to adjust to new technology to the same extent as in-store solutions.

TV and other non-film content features heavily in ODM services and is often available on an episodic basis allowing consumers to create compilation DVDs.

Unlike the traditional DVD supply chain, ODM enables rights holders to monetise content with a short 'shelf life' such as sports fixtures.

At the outset, a large proportion much of the content accessible through ODM solutions will not be available through traditional distribution channels, meaning that ODM transactions will be largely incremental to the existing video business.

However, as more mainstream content is made available the rate of cannibalisation will increase exponentially.