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DEG Reports Home Entertainment Consumer Spending Through Q3 Up 1% Over Last Year

26 Oct, 2012 By: Thomas K. Arnold

As the crucial fourth quarter gets underway, studio executives and video retailers alike can take heart in the fact that the latest statistics show continued stabilization in consumer home entertainment spending, which prior to this year had been on a steady decline since 2007.

Consumer spending on home entertainment in the first nine months of this year is up 1% from the first nine months of 2011, according to the latest report from DEG: The Digital Entertainment Group.

The lift — which reflects a slight 0.24% uptick in the third quarter after a 1.4% gain at the year’s mid-year mark — is once again attributed to gains in Blu-ray Disc sales, subscription streaming and electronic distribution.

Meanwhile, DEG reports that UltraViolet registrations have surpassed 6 million. UltraViolet — a studio-backed initiative to boost discs sales by providing disc buyers with a “digital locker” to store their purchased content in the cloud — continues to roll out into other countries, with Canada up next before the end of this year.

As of Sept. 30, 2012, consumers this year have spent an estimated $12.342 billion on home entertainment, up from $12.215 billion for the same period last year. The third quarter accounted for $3.94 billion of this year's tally, compared with $3.93 billion last year.

Packaged-media sellthrough spending for DVD and Blu-ray Disc combined for the year is pegged at $5.4 billion, down from $5.6 billion in the first nine months of 2011 — a drop of just 3.8%, a far cry from the double-digit drops the industry saw in prior years. Factor in electronic sellthrough and the dropoff dwindles to 1.7%, with EST spending rising from $406 million in the first nine months of 2011 to $517 million in the same period this year — a gain of 27%.

Blu-ray Disc spending continued to post significant gains, rising 13% in the third quarter alone. Sales of catalog titles fared even better, rising 22% between June 1 and Sept. 30, 2012, from the comparable period a year ago.

Subscription streaming spending nearly tripled, from $464 million in the first nine months of 2011 to $1.68 billion in 2012 as of Sept. 30.

That more than made up for huge drops in disc rental, both in brick-and-mortar stores (down 29.3% so far this year) and via subscription (down 50.4%).

Factor in an 18.5% bump in year-to-date kiosk rental spending — mostly on Redbox — and the video rental category as a whole — physical plus subscription streaming — saw spending rise 3.7% to $6.42 billion in the first nine months of this year.

The DEG report says there were 2.8 million Blu-ray Disc players (including BD set-tops, PS3s and HTiBs) sold in the third quarter, up 5% from a year earlier. Total household penetration of all Blu-ray compatible devices now stands at close to 50 million U.S. homes.

In the third quarter, 7.8 million HDTVs were sold to U.S. consumers. HDTV penetration to date is now at pegged at more than 101 million U.S. households.

DEG numbers are compiled using information and statistics provided by DEG members, various tracking sources and retail input.

About the Author: Thomas K. Arnold

Thomas K. Arnold

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