Log in
  

NPD: Disc, Not Digital, Drives Home Entertainment Revenue

30 Jan, 2013 By: Erik Gruenwedel


SVOD and EST may get the attention, but Blu-ray and DVD are driving sales, according to a research report


Sales of Blu-ray Disc and DVD movies remain the largest source of revenue for the movie industry, accounting for 61% of home video spending on movies (excluding Netflix and other subscription video-on-demand services) in 2012, according to new data from The NPD Group. The percentage was down from 64% in 2011.

Port Washington, N.Y.-based NPD attributed the decline in part to lower average prices paid for Blu-ray titles, which fell 7% to $19.97 per unit last year.

“There is a significant base of video customers in the U.S. who continue to be comfortable with physical formats, and a large majority haven’t made the complete transition from discs to digital video,” said Russ Crupnick, media analyst with NPD. “For the time being, at least, consumers still like to own and rent movies and TV shows on DVD and Blu-ray, even in a world of where connected devices and digital rental, streaming and ownership options are becoming more accepted and commonplace.”

Meanwhile, digital distribution of movies continues to grow — representing 16% of consumer spending in 2012, which is up 2% from 2011. Transactional video-on-demand revenue from cable, satellite and telco operators rose 1% to reach 12% of total revenues. 

Transactional VOD accounted for 72% of digital revenue, followed by electronic sellthrough with 16% of VOD revenue, and Internet VOD at 12% of revenue.

Interestingly, while iTunes dominates the market for electronic sellthrough and Netflix leads the SVOD market, there is more competition for iVOD rentals.

Apple's iTunes accounted for 45% of iVOD sales, followed by Amazon Instant Video with 18%, Walmart's Vudu with15%, Microsoft's Xbox 360 video with 14% and others at 8%.

Redbox continues to dominate the disc rental market with nearly half (46%) of all physical disc movie rentals in 2012, up 8% from 2011. By-mail disc rentals fell 5% to 32% market share (from 37%) — underscoring Netflix's focus on SVOD. Movie rentals from brick-and-mortar stores fell 2%, and now represent 22% of all video rentals, down from 24% in 2011.

Finally, NPD said television programming continues to be the preferred content among SVOD and EST consumers. About 80% of Netflix streaming subs watched TV shows, while 90% of EST transactions were TV programs.

“In the market for television content, Netflix has amassed a strong slate of popular programs, including 'Breaking Bad' and 'The West Wing,' all of which capitalize on time-shifting behavior because they immerse the viewer for shorter timeframes than full-length movies do,” Crupnick said. “As long as TV content remains compelling and easily available, we can expect to see that sector of home video expand.”

 

 


Add Comment