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Report: Consumers Still Spend More on Buying Movies Than Renting

1 Jun, 2012 By: Erik Gruenwedel

Average household spending on physical media dropped 11% in 2011

Consumers still spend more money buying movies on DVD and Blu-ray Disc than renting them, despite spending 11% less overall on physical media in 2011, according to a new report.

Average household spending on physical discs dropped to $133.31 in 2011, compared with $149.53 per household in 2010, according to IHS Screen Digest.

Of the 2011 spending total, 61% — equivalent to $81 per video home — went to buying discs; the remaining $52 was spent on lower-cost rentals.

While the report says household spending on physical media has declined steadily since 2006 from an average of $206.78, it doesn’t appear to factor in price declines at the retail level. IHS said spending levels, which have declined since 2004, are expected to decline again in 2012, to $123.50 per household.

The report says prospects for the physical video market could improve this year as consumer spending at the domestic box office in March increased more than 20% from the same time last year. With box office hits such as Lionsgate's The Hunger Games and Disney/Marvel's The Avengers still to be released at retail (not to mention Warner’s upcoming The Dark Knight Rises), a real potential exists for a lift in the video market this year that could minimize the overall projected decline, according to the report.

“The overall view for U.S. video spending is less bleak when other forms of transactional and on-demand subscription video are added to the mix,” said Michael Arrington, senior analyst for U.S. video at IHS. “If revenue were to be added from other viewing options such as video-on-demand, Internet-based sales and rentals, and subscription streaming from providers like Netflix and Hulu Plus consumer spending across all outlets of home video would amount to nearly $17.2 billion, a much more substantial figure.”

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