DVD giveaways now equal the number bought

Newspapers and magazines are giving away as many DVDs now as are being bought by consumers, according to new research.

In a frenzied battle to gain, or at least maintain, circulation in the highly competitive national press, British newspapers are cover-mounting so many free DVDs that the numbers being purchased per household is in marked decline, a report by the consultancy Screen Digest has found. The phenomenon is now of serious concern to film studios and retailers.

Helen Davis Jayalath, senior analyst at Screen Digest, said: "The sheer number of free discs is taking away appetite to buy any discs."

Films such asThe Fabulous Baker Boys, Donnie Darko and Star Wars were among the 77 titles distributed by national newspapers last year. While cover-mounting is not uncommon in other countries, the UK is unusual due to the sheer number of units involved - 130 million discs in 2005 alone - and the fact that they have no impact on the cover price of the accompanying publication.

On the Continent, consumers often have to pay extra if they want the DVD. Given the high proportion of papers delivered direct to homes in the UK, this would not be practical here.

In the first quarter of 2006, 54 million DVDs were given away by newspapers and magazines in the UK, about the same number as retailers sold through traditional channels.

This coincides with a marked decline in DVD sales when measured on a per-household basis. The average household purchases were down from 12.5 DVDs in 2004 to 11.4 in 2005. Though total DVD sales increased last year, by 7.5 per cent to 211 million discs, a sharp drop in their price meantrevenues from the DVD retail market were flat, for the first time, at £2.2bn.

Newspapersgive away most of the DVDs - magazines tend to offer other freebies, such as free make-up with a women's title.

For newspapers, DVDs are an alternative to cover- price competition. In the past, the giveaways in newspapers have taken other forms. In the 1980s, it was bingo, the 1990s brought cut-price travel offers, and earlier this decade it was audio CDs.