Blu-ray, 4K and SVOD Drive Q3 Consumer Home Entertainment Spending

3 Nov, 2016 By: Thomas K. Arnold

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Ten years after the format launched, Blu-ray Disc sales continue to climb, with the latest report from DEG: The Digital Entertainment Group reporting an estimated 6% spike in Blu-ray Disc sales in the third quarter of this year.

Overall, subscription streaming — mostly Netflix — continued to drive home entertainment spending in the three-month period that ended Sept. 30, DEG reported.

Consumers spent an estimated $1.6 billion on subscription streaming in the third quarter, up 24% from the same quarter in 2015, when spending was just under $1.3 billion.

Total consumer spending in the quarter came in at an estimated $4.17 billion, up nearly 4% from $4.02 billion in the year-ago quarter.

Disc sales — still the key barometer in the home entertainment business — slipped nearly 9% in the quarter, to $1.05 billion, down from $1.15 billion in the third quarter of 2015. The decline was due to a continued dropoff in DVD sales that the uptick in Blu-ray Disc sales could not completely counter. Factoring in electronic sellthrough, or Digital HD, total consumer spending on home entertainment purchases was down 3.5% in the quarter, to $1.53 billion, from $1.59 billion in the year-ago quarter.

Electronic sellthrough continues to grow, but the growth rate, which used to be in the double digits in prior years, has slowed to less than 8% so far this year. In the quarter, electronic sellthrough sales rose 9.8% to an estimated $486 million, up from $443 million in the third quarter of 2015.

As of Sept. 30, consumers had spent a total of $13.06 billion on home entertainment, up 2.5% from $12.74 billion in the first nine months of 2015.

On the consumer electronics front, according to DEG, an additional 2 million 4K Ultra HD TVs were sold in the U.S. market during the quarter, twice as many as in the third quarter of 2015. That brings the total number of sets purchased to 9.9 million. The number of 4K Ultra HD Blu-ray title releases now available for purchase stands at 84.

HDTV penetration, meanwhile, is at 85%, or 104.5 million U.S. households, the DEG said. Blu-ray Disc playback devices (including set-tops and game consoles) are in nearly 87 million U.S. households.

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