DEG Reports Mid-Year 2017 Gains for Home Entertainment

3 Aug, 2017 By: Thomas K. Arnold

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Consumer spending on home entertainment edged up nearly 2.6% in the first half of the year to $9.17 billion, from $8.94 billion in the first six months of 2016, according to estimates released Aug. 3 from DEG: The Digital Entertainment Group.

Gains were driven by a robust second quarter that saw spending rise 3.25%.

As has come to be expected, Netflix is largely responsible for the overall uptick, with consumer spending on subscription streaming up 24% at the year’s midpoint, at an estimated $3.62 billion, compared with $2.92 billion in the first half of 2016.

Electronic sellthrough also posted impressive gains of 8.3%, rising to an estimated $1.07 billion in the first half of 2017, from $990 million in the comparable period last year.

The spike in EST, however, wasn’t enough to stem the continued slide in home entertainment purchases. Consumers spent a total of $3.38 billion on buying movies, TV shows and other pre-recorded content in the first half of 2017, 5.2% less than they did in the first half of 2016, when spending was estimated at $3.57 billion.

Physical media sales were down 10.4% in the first half to $2.3 billion, from $2.58 billion in 2016, but DEG says the second quarter saw a “significant rebound,” with a 2% rise in Blu-ray Disc sales capping the Q2 disc decline to 5.8% — compared with 14.3% in the first quarter.

While overall VOD slowed, Internet VOD “continued to show strong results,” DEG says, with a 14% gain in the first six months of the year.

More than 4.8 million 4K Ultra HD TVs were sold in the first half of 2017, with the total number of sets sold to date exceeding 20 million, DEG reported. Approximately 1 million Ultra HD Blu-ray Disc playback devices were sold in the first half of the year, bringing the total number of players (including game consoles) sold to 4.3 million since the format was launched in early 2016.

With the Walt Disney Studios now in the game, DEG says Ultra HD Blu-ray Disc content  “is expanding rapidly,” with 166 titles in the market and consumers buying approximately 4 million units valued at approximately $107 million.

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