MARKETING AUDIT

End of the Reel - Marketing Audit Report for the DVD Industry in Canada

Table of Contents

Value and the Revenue of the Industry3

DVD Industry Market Growth4

Rental DVDs5

Failure of Blu-ray6

Competition in the market of DVDs industry in Canada8

Depreciation and wages8

Internal competition9

External competition10

Piracy in DVD Industry11

Forms of piracy12

Conclusion14

References15

End of the Reel - Marketing Audit Report for the DVD Industry in Canada

Introduction

The DVD industry in Canada is growing with the passage of time and is as old as the Digital Video Disc itself. The Canadian nation is very fond of entertainment over the TV and internet and buys DVDs for music, movie and other purposes. According to Canadian Radio-television Telecommunications Commission, the entertainment category that has bagged the second position is the consumer spending on DVDs. For the year 2010, the DVD spending has increased by 7.4 percent. This was coupled by a sharp decline of 68.9 percent in the sales of videocassettes; this decline amounted to $720 million. Hence, there is a need to perform market audit on the industry to analyze the extent to which the DVD industry can save or cannibalize the Videocassettes industry and measure the threats that are there for the DVD industry (Vlessing 2011, p. 9).

The DVD industry in Canada at a glance

If we were to segment the DVD industry in Canada by products, we can see from the pie chart below that subscription based rentals make up a majority of this industry.

The revenue for the industry for the past year was $6.6 billion while the profit for the entire industry amounted to $243.5 million. There are 4,288 business associated with the DVD industry in Canada, and the annual growth rate between 2003 and 2016 expressed in the graphs hereunder (IBISWorld, 2011). The rise in the consumer spending on DVD is the result of the increase in disposable income as discussed earlier and the rise in the time available for leisure and sports activities. Looking at the graph, we can see that the industry as a whole is towards a decline. This is because DVD is a technology product and technology products have a very small shelf space. It is a modest capital industry. Hence, the number of businesses in the industry will easily switch to other businesses without any barriers to exit. The industry assistance from the state regulator is low but coupled with low volatility in the revenues earned, the businesses in the industry can be deemed fairly stable.

The decline in the consumer spending is the result of global financial crisis that hit the world and the consequent rise in the rate of unemployment. In addition, the external competition to the DVD industry also has an impact on the bottom line for the industry. Hence, the decline shown in the above graph is the result of bargaining power of customers and low cost of switching associated with the DVDs. The consumers, especially the Canadian market, have a very high trend of going for the latest technology. The estimate is a shift from Digital Video Disk ...