Online market leadership doesn’t protect EzyDVD from collapse
One immediately obvious lesson from the collapse of DVD retailer, ezyDVD, last month is that online market leadership doesn’t necessarily translate into commercial success.
That point is underlined by the release this week of Hitwise data showing www.ezydvd.com.au as being the clear market leader amongst online video and games retailers in Australia. The site is thought to have attracted around 40,000 consumers every day.
Of course, ezyDVD wasn’t just an online retailer; the company also owned and operated some 25 stores around Australia, with a further 30 or so stores operated under franchise.
Slowing sales in the stores, rather than slowing online sales, was probably the main reason why its bankers, the Commonwealth Bank, decided to call in the receivers Ferrier Hodgson just before Christmas.
That hasn’t yet been revealed and may never be known. The receivers said only that the slowing sales compounded an already delicate situation arising from high existing levels of debt and trading losses.
In any event, the company has now been sold to the Franchise Entertainment Group (best known for their BlockBuster and Video Ezy operations).
Media Reports this week indicated the sale involved the EzyDVD brand, the online business and the franchise network along with stock and equipment and 11 company-owned stores.
But 15 non-profitable stores have been closed while the distribution facility and head office in Adelaide will also close within three months.
EzyDVD, which began trading in 1999, is thought to have had revenues of up to $100 million a year. One media report suggested it had been sold for around 10% of that, namely $10million, but that hasn’t been confirmed.
Nor has there been any confirmation of any future for a planned ezydownload service that the company was working on.
Ezydownload was to rival Telstra Bigpond’s download movies service, and was created out of the ashes of the failed company ReelTime.
EzyDVD founder, Jim Zavos, was involved with both companies. But last year, despite Davos having reportedly said EzyDVD
spent a million dollars in development of Ezydownload, the launch of the service was deferred.
Hitwise Australia - Top 10 Video and Games Websites
For the week ending 10/01/2009
This list features the most popular websites based on Australian Internet usage for the week ending January 10, 2009, ranked by market share of visits across the Shopping and Classifieds - Video and Games industry.
| Rank
| Website
| Market Share
|
1. | www.ezydvd.com.au | 11.04% |
2. | www.ebgames.com.au | 7.82% |
3. | www.jbhifionline.com.au | 6.90% |
| 4. | www.quickflix.com.au | 4.44% |
| 5. | www.abcshop.com.au | 3.78% |
| 6. | www.sanity.com.au | 3.76% |
7. | www.bigpondmovies.com | 3.69% |
| 8. | www.borders.com.au | 3.54% |
| 9. | www.videoezy.com.au | 3.37% |
| 10. | www.cduniverse.com | 3.28% |
Note - the Hitwise data featured is based on Australian market share of visits, which is the percentage of online traffic to the domain or industry,
from the Hitwise sample of 2.95 million Internet users in Australia. Hitwise measures more than 1 million unique websites on a daily basis, including
sub-domains of larger websites. Hitwise categorises websites into industries on the basis of subject matter and content, as well as market orientation and competitive context.
Source - Hitwise - 10/01/2009 - based on market share of visits.
For more information go to:
www.hitwise.com.au/datacenter/retail/rankings.php
www.ezydvd.com.au
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