DEG Reports Consumer Home Entertainment Spending Rose in 2016

6 Jan, 2017 By: Thomas K. Arnold

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Consumers spent slightly more on home entertainment in 2016 than they did in 2015, preliminary numbers released Jan. 6 by DEG: The Digital Entertainment Group show.

DEG says total consumer spending rose 1.36% to an estimated $18.28 billion, up from $18.03 billion in 2015.

Drivers behind the bump were a slowdown in disc sales declines and hefty double-digit gains in streaming, chiefly Netflix, since DEG doesn’t measure Amazon viewings.

Combined DVD and Blu-ray Disc sales for the year came in at an estimated $5.49 billion, down 9.55% from the $6.07 billion consumers spent on discs in 2015. The yearly decline is less than many observers expected, given the double-digit drops in prior years, but could have been helped by a slight uptick in Blu-ray Disc sales.

Subscription streaming and video-on-demand, meanwhile, generated a combined $8.3 billion, DEG numbers show — a gain of 17.8%. Streaming alone, much of it through OTT leader Netflix, rose 22.6% to $6.23 billion.

Total sellthrough sales, which include both disc and electronic sellthrough (EST), came in at an estimated $7.50 billion, 5.97% less than 2015.

EST, however, leveled out after several years of double-digit gains. DEG says EST sales for the year grew just 5.42% — dragged down by an anemic 0.26% gain in the fourth quarter.

The launch this year of Ultra HD Blu-ray Disc has been remarkably successful, DEG says. Year-end numbers show there are now 110 Ultra HD Blu-ray Disc titles in the market, with 250 titles projected by the DEG to be available in 2017. According to the Consumer Technology Association, about 10 million 4K Ultra HD TVs were shipped during 2016, representing nearly $10 billion in consumer spending. By the end of 2017, CTA projects there will be 30 million 4K Ultra HD TVs in the market. In addition, approximately 300,000 Ultra HD Blu-ray players shipped in calendar 2016, accounting for $66 million.

Without providing sales numbers, DEG reported “first-year sales data shows consumers are enthusiastically embracing” Ultra HD Blu-ray Disc, buying films and TV shows “at a faster pace than they did” in 2006 when two high-definition disc formats, Blu-ray Disc and HD-DVD, were launched.

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