Advanced Television

US home entertainment set for growth

January 8, 2013

By Colin Mann

Consumer spending on home entertainment in 2012 in the US rose for the first time in five years, albeit marginally, coming in at just over $18 billion according the Year-End 2012 Home Entertainment Report compiled by members of trade body DEG: The Digital Entertainment Group, tracking sources and retail input.

According to the DEG, resilience, adaptability and innovative delivery channels characterised the home entertainment industry in 2012. Total consumer spending on home entertainment topped $18 billion for the year, a 0.23 per cent increase on 2011.

The industry’s highest margin businesses, Blu-ray Disc, electronic sell-through (EST), and VoD, continued to grow during every quarter of the year. In addition, in just over a year since its launch, digital content ecosystem UltraViolet has achieved significant milestones in industry and consumer adoption and is rapidly becoming an integral part of the home entertainment landscape.

The increased availability of content, along with a broader range of UltraViolet-enabled services and platforms in the marketplace, contributed to an enormous boost in EST spending for the year, says the DEG.

Among the highlights for 2012:
Blu-ray Disc spending rose nearly 10 per cent for the year. Consumers have clearly adopted Blu-ray as the standard for home entertainment viewing, with spending on Blu-ray catalogue titles jumping 25 per cent for the year.
Consumers also increasingly purchased their entertainment via EST. Consumer spending on EST climbed 35 per cent compared to 2011. Total digital distribution spending, EST and VoD combined, grew 28 per cent for the same period. Total digital now accounts for nearly 30 per cent of the domestic home video market, up from 19 per cent compared to 2011.
Consumers embraced UltraViolet as a substantial number of new titles became available. To date, more than nine million UltraViolet accounts have been created, more than double the number as of June 2012, and 8,500+ UltraViolet-enabled titles are now available from nine major content providers: Anchor Bay Entertainment, BBC, DreamWorks Animation, Lionsgate, Paramount Home Media Distribution, Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Bros. Home Entertainment.
Consumers are now making Blu-ray Disc players integral to their consumer home entertainment experience. The number of Blu-ray homes continues to steadily grow, climbing 7 per cent for the year (including BD set-tops, PS3s and HTiBs.) Total household penetration of all Blu-ray compatible devices now stands at close to 51 million U.S. homes according to numbers compiled by the DEG with input from retail tracking sources.
Consumers enhanced their home entertainment experience by purchasing more than 39 million HDTVs in 2012. HDTV penetration is now at more than 108.4 million US households according to numbers compiled by the DEG with input from retail tracking sources.

The top selling home entertainment titles released in 2012 at year’s end were:

1. Avengers
2. Hunger Games
3. Dark Knight Rises
4. Twilight Saga: Breaking Dawn – Part 1
5. Brave
6. Ted
7. Dr. Seuss’ The Lorax
8. Sherlock Holmes: A Game of Shadows
9. Madagascar 3: Europe’s Most Wanted
10. Puss in Boots

“It’s exciting to see how the growth of the new businesses is offsetting the natural decline of DVD,” said Ron Sanders, president of Warner Home Video. “It’s the collective benefit of great growth from EST, VoD and Blu-ray that has allowed us to stabilise. I think we’re poised to get back to growth.”

Categories: Articles, Markets, OTT, Research, VOD