Hollywood extends turnaround in home video sales

Hollywood studios continue to see a slow turnaround in home video sales after a seven-year decline, as consumers increase the numbers of movies and TV shows they stream online and buy more HD Blu-ray discs as DVDs fall from favour.

The Digital Entertainment Group, a trade group whose members include studios and electronics companies in the video business, has revealed that total consumer spending in the US, which includes subscription VoD, topped $8.4 billion compared to $8.3 billion last year.

Blu-ray continued to grow steadily at double-digital rates with consumer spending on discs up 13.3 per cent compared to the same period last year. Catalogue titles increased 26 per cent, further cementing the notion that Blu-ray has become the standard in home entertainment.

The number of Blu-ray homes continued to rise, with 1.4 million Blu-ray players (inclusive of BD set-tops, PlayStation 3s and HTiBs,) sold in the second quarter, bringing the total household penetration of all Blu-ray compatible devices to more than 42.1 million US homes.

Total physical sellthrough, which includes DVD, dipped 3.6 per cent to $3.7 billion from $3.8 billion last year. When factoring in electronic, total sellthough declined nearly 2 per cent to $4 billion from $4.1 billion.

Digital distribution, which includes electronic sellthrough (EST), transactional VoD and subscription VoD services such as Netflix, surged more than 77 per cent to $2.4 billion compared to $1.3 billion last year.

Notably, EST increased nearly 22 per cent to $329 million compared to $270 million last year. Electronic sellthough grew 27 per cent in the second quarter compared to Q2 in 2011. Additionally, transactional VoD was up 11.6 per cent to $983 million compared to $881 million in the mid-year of 2011, including a 17.2 per cent increase in the second quarter compared to Q2 2011.

Subscription VoD revenue topped $1.1 billion, up 430 per cent from $208 million last year.

The rental business – with the exception of kiosks – continued to decline, with total revenue, including VoD, dropping 17.6 per cent to $3.2 billion compared to $3.9 billion last year.

Kiosks, spearheaded by Redbox, grew revenue to $990 million, up nearly 23 per cent from $805 million last year.

High street video store revenue fell more than 33 per cent to $597 million from $896 million, while by-mail disc rentals plummeted 50 per cent to $671 million from more than $1.3 billion last year.

Cloud-based digital locker platform UltraViolet recently surpassed 4 million household accounts. The growth of UltraViolet underscores the notion consumers are responding favourably to the increased availability of EST, as well as the growing range of UltraViolet services.

Finally, more than 4.6 million HDTVs were sold to US consumers in second quarter 2012; HDTV penetration to date is nearly 80 million US households.

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