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DEG Report: Home Video Market Resilient

7 Jan, 2009 By: Thomas K. Arnold

The home entertainment market proved a lot more stable in 2008 than many had feared. Final figures for the year show consumers spent an estimated $22.4 billion buying and renting home entertainment software, down just 5.5% from the previous year’s $23.7 billion.

Figures compiled by DEG: The Digital Entertainment Group on behalf of the studios show consumers spent $14.5 billion on buying DVDs in 2008, down from $16 billion in 2007. Blu-ray Disc spending, however, added another $400 million to the pie.

The rental business was flat at $7.5 billion, although Blu-ray Disc rentals generated an estimated $350 million.

All told, Blu-ray sales and rentals accounted for $750 million in consumer spending in 2008, four times the total in 2007, when there were still two rival high-definition formats in the market. The other format, HD DVD, was yanked from the market last February.
“We’re seeing that as consumers prepare for the analog shutoff date, there is a strong surge of interest in high-def content, and Blu-ray Disc is the ideal format for consumers who want to fully experience HD,” said Amy Jo Smith, executive director of DEG: The Digital Entertainment Group.

Studios shipped an estimated 1.4 billion software units to retail in 2007, down from 1.6 billion in 2007, according to figures compiled for DEG by Swicker & Associates. That brings the total number of units shipped since DVD’s 1997 launch to more than 10 billion discs. In the fourth quarter alone, 453 DVDs shipped to retail, down from 662 million in the fourth quarter of 2007.   

The top-selling home video release of 2008, according to Home Media Magazine market research, was Warner Home Video’s The Dark Knight, which sold an estimated 10.8 million DVDs and Blu-ray Discs to U.S. consumers. The title generated headlines late last year when its first-week worldwide sales tally topped 13.5 million units, including sales to rental dealers.

Paramount’s Iron Man finished second, with U.S. consumer sales of 8.1 million units, followed by 20th Century Fox’s Alvin and the Chipmunks at 7.4 million units, Warner’s I Am Legend at 7 million units and Paramount/DreamWorks’ Kung Fu Panda at 6.7 million units.

Rounding out the top 10: Walt Disney Studios’ Wall-E (No. 6, 6.4 million units) and National Treasure 2 (No. 7, 5.4 million units), Paramount’s Indiana Jones and the Kingdom of the Crystal Skull (No. 8, 5.4 million units), Disney’s Enchanted (No. 9, 4.8 million units) and Paramount/DreamWorks’ Bee Movie (No. 10, 4.3 million units).

The DEG also says 25 million DVD players were sold to U.S. consumers in 2008, down from 33 million the previous year, while the number of Blu-ray Disc playback devices—including both standalone players and Sony’s PlayStation 3 video game console—now stands at nearly 10 million. Three million Blu-ray playback devices sold in the fourth quarter alone.

The total number of DVD players in U.S. homes is now pegged at 264 million, for a household penetration rate of 92%.

The DEG also estimates that more than 50 million HDTV sets have been sold to consumers, bringing the number of HDTV households to nearly 40 million.


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