A high street retail crisis in the UK has crashed into what was shaping up to be a bumper holiday season for distributors.

UK film distributors were preparing to release DVD titles such as Mamma Mia!-The Movie, Hancock, Wall-E, The Dark Knight, Wanted and The Chronicles of Narnia: Prince Caspian.

Mamma Mia! in particular has been breaking records at the box office and snatched the record as the fastest selling DVD launch ever in the UK.

But the film, which ironically many believe has been acting as an antidote to the recession, has become a victim of economic troubles in the high street.

In November, Woolworths went into administration bringing Entertainment UK (EUK), one of the country's largest DVD distributors, down with it. Days later music, software and DVD distributor Pinnacle Entertainment suffered the same fate.

The timing of EUK's administration couldn't be worse, given that a huge proportion of consumers who don't buy DVDs generally, will buy them as a gift in the run up to Christmas.

'Traditionally 37% of the video retail business is done in quarter four of every year' says Lavinia Carey, Director General of British Video Association.

EUK supplied DVDs to the stores including Woolworths, Sainsburys, Morrisons, Borders, Asda and Zavvi.

As DVD stock gets caught up in the legal wrangle of administration, distributors are scrambling to replicate new stock, to put product on the shelves and to claim back money from administrators that is owed.

'Its causing problems for all video distributors but its not the same for every company. Some have used a variety of wholesalers' said Carey.

The home entertainment industry in other countries hasn't fallen victim to the same fate because they don't have large wholesalers dominating the business.

Just as importantly, over supplyof DVD is a very British problem. The UK's overstocking problem fed the price decline of DVDs and forced wholesale distributors like Entertainment UK to operate on low margins.

Experts suggests that a secondary effect of the problem maybe a flood of stock from the troubled wholesalers into the market, forcing down prices in the new year.

Going forward content owners may put greater emphasis on online operations and more retailers may not be so reliant on any one operator. Retailers may be more willing to deal directly with film distributors.

An industry insider says 'All distributors are at risk of losing money, some are exposed for eye-watering amounts.

'For Entertainment UK to collapse like this shows we need a few more wholesalers out there. It's too risky putting all your eggs in one basket. I don't know where it's going to end but I think that the industry will be in a better place.'

Ironically, the general outlook for DVD has been strong. In October of this year the British Video Association (BVA) revealed that 51.7m DVDs were sold during the third quarter - the sector's best-ever performance in the period and up 6.5% on the quarter in 2007.

The BVA also reported that 161.8m DVDs were sold from January until the end of September, a rise of 7.4% on the same period in 2007.

Piracy remains an issue and downturns have exacerbated the problem in the part but copyright theft is less concentrated on DVD.

'Whilst it's generally accepted that in an economic downturn crime does increase, we're already in the midst of a switch from hard goods piracy to illegal online consumption,' said Eddy Leviten, of the Federation Against Copyright Theft (FACT).

'It's a new phenomenon for UK piracy where people are able to access illegal content at relatively high speed. People are looking to spend less money and to get more things for free. There are undoubtedly ways to do it online.'

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