Home Entertainment Spending Holds Steady in 2011

  • Home Entertainment Spending Holds Steady in 2011

    By : Thomas K. Arnold | Posted: 06 Jan 2011
    tarnold@questex.com

    Home entertainment is holding its own in an increasingly fragmented market for consumer eyeballs, according to final 2010 figures released today by DEG: The Digital Entertainment Group.

    Consumer spending on packaged media and digital delivery for the year came in at an estimated $18.8 billion, just 3% less than the revised $19.4 billion* total reported for 2009. Sellthrough spending, including DVD, Blu-ray Disc and electronic sellthrough, is estimated at $11 billion, while the rental sector, including VOD, contributed $7.8 billion, according to DEG numbers compiled on behalf of the studios.

    High points include continued strong gains in Blu-ray Disc sales and rentals, as well as digital distribution. Total consumer spending on Blu-ray Disc software rose 53.3%, to $2.3 billion in 2010 from $1.5 billion in 2009, with purchases up 68%, to $1.8 billion from just over $1 billion.

    Digital distribution also posted striking gains in 2010, with total consumer spending on electronically delivered movies and other programming jumping 19% to an estimated $2.5 billion. The biggest winner was video-on-demand, which brought in $1.8 billion, 20.8% more than in 2009. Broadband electronic sellthrough grew 15.7% to $683 million.

    In another encouraging sign, consumer transactions for pre-recorded content rose 1%, to 3.54 billion, the second consecutive year of gains.

    “We continued to see strong growth in Blu-ray and significant gains in digital distribution this year, despite a tough economy,” said DEG president Ron Sanders, also president of Warner Home Video. “We also saw a slight increase in consumer transactions, which is a clear indication that consumer demand for home entertainment remains healthy.”

    With sales of 15.3 million units, 20th Century Fox Home Entertainment’s Avatar is the top-selling title of the year, DEG says. The film also is the top Blu-ray Disc seller of all time, with 5 million Blu-ray Discs currently in consumer homes.

    Several of the year’s other top hits, including Universal Studios Home Entertainment’s Despicable Me, Paramount Home Entertainment’s Iron Man 2 and Walt Disney Studios Home Entertainment’s A Christmas Carol, generated upwards of 30% of their initial sales from Blu-ray Disc. And theatrical catalog sales on Blu-ray Disc are up a healthy 52% from 2009, indicating that consumers are beginning to rebuy their favorite movies on the high-definition format instead of limiting their purchases to new releases.

    DEG numbers — compiled with input from the studios and key retailers as well as Rentrak Corp.’s Home Video Essentials — also show a 34% uptick in Blu-ray rentals at brick-and-mortar outlets, despite the closure of Movie Gallery stores in the wake of the No. 2 rental chain’s 2010 liquidation. Industry pundits say this is a result of the fact that only Netflix and Redbox have to wait 28 days to rent new releases from most of the major studios, while Blockbuster and other physical stores can rent titles the same day they become available for sale.

    While Blu-ray Disc and digital delivery posted healthy gains, the DVD market showed further signs of aging, according to DEG numbers. Total consumer spending on DVD purchases and rentals slipped 11.4% in 2010 to $14 billion.

    The DEG also estimates that the number of Blu-ray Disc playback devices in U.S. households, including both dedicated set-top players and PlayStation 3 game consoles, soared to 28.5 million in 2010, up 68% from the total at the end of 2009. Consumers in the fourth quarter alone bought about 6 million playback devices, up from 4.5 million in the fourth quarter of 2009.

    *Consumer spending totals for 2010 previously had been reported at $20 billion, but were subsequently revised downward by DEG to $19.4 billion.


    January 10th, 2011 | Joe Wilka |

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