DEG Numbers Show Signs of Recovery in Home Entertainment

Jul 21st, 2010 by dvdxplayer 1,211 views |Comments Off

The home entertainment industry began to recover in the second quarter of this year, with consumer spending on pre-recorded entertainment products relatively flat with second-quarter spending in 2009.

Numbers released today by DEG: The Digital Entertainment Group also indicate a 2.3% rise in consumer transactions in the first six months of this year.

A tough first quarter, however, still led to a 3.3% decrease in first-half spending. Consumers spent an estimated $8.8 billion on DVD and Blu-ray Disc sales and rentals as well as digitally distributed programming, compared with a revised estimate of $9.1 billion in the first six months of 2009.

Spending was down just 0.7% in the second quarter, a far cry from the 8% decline reported in the first quarter of 2010.

“Clearly, we are still grappling with a challenging marketplace and a tough economy, but overall the trends we are seeing are encouraging,” said Warner Home Video president Ron Sanders, also president of DEG: The Digital Entertainment.

Packaged media sales slipped 3% in the second quarter, but factoring in a steep first-quarter drop the first-half decline came in at 7.1%, for a total of $4.7 billion.

Rental spending, according to Rentrak Corp.’s Home Video Essentials, slipped 4.9% in the first half of the year to finish at just under $3 billion. The decline is due mostly to the closure earlier this year of hundreds of Movie Gallery and Hollywood Video stores, although kiosk revenue — mostly from Redbox’s ubiquitous red vending machines — is estimated to be up a healthy 55%.

Digital distribution accounted for $1.1 billion in first-half consumer spending, up 23.1% from the first half of 2009. Electronic sellthrough (mostly through Apple iTunes) generated an estimated $285 million, up 36.9%, while video-on-demand (VOD) brought in an estimated $865 million, up 19.1%.

Blu-ray Disc also continued to post impressive gains, with combined consumer spending on purchases and rentals of the high-definition disc estimated at $982 million for the first half of the year. Blu-ray Disc sellthrough rose 84%, to $733 million. Isolating the second quarter, Blu-ray Disc sales were up 112% to $363 million, thanks at least in part to the Blu-ray Disc success of 20th Century Fox Home Entertainment’s Avatar, which in April sold an estimated 2.7 million Blu-ray Discs in its first four days in stores.

DEG numbers are derived from various sources, including the studios, key retailers and industry tracking sources.

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