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Good News on the Horizon for Home Entertainment

23 Jun, 2010 By: Thomas K. Arnold

No, as far as I know, Hell has not frozen over. And pigs aren’t flying — at least, not the last time I looked out my window, which overlooks the flight path into John Wayne Airport.

But lo and behold, we’ve just received a glowingly positive forecast for the film business, from no less reputable a source than PricewaterhouseCoopers, the respected accounting firm. And packaged media, everyone’s favorite whipping boy, no longer has to duck its head in shame.

The PricewaterhouseCoopers report predicts that over the next five years, worldwide consumer spending on movies — meaning theater tickets, DVDs, Blu-ray Discs, VOD and EST — will grow to a record $107.5 billion in 2014, from $85.1 billion in 2009. That’s an annual growth rate of nearly 5 %.

The growing popularity of 3D films will spur box office revenue, while Blu-ray Disc sales, shorter theatrical-to-video windows (a la Alice in Wonderland) and low-price rentals of the sort offered by the proliferating Redbox kiosks will help “reinvigorate the physical home-video market,” according to the report.

Say again? Disc sales are expected to start rebounding next year and then will slowly rise each year to $15.6 billion in 2014, according to the report. That’s not a big gain — about 1.6% from 2009— but hey, we’ll take it. After the declines we’ve been seeing in our business, even staying flat would be a good thing — particularly in light of the fast growth expected to be seen in the digital arena, with PricewaterhouseCoopers predicting digital downloads of movies will triple from $364 million in 2009 to about $1.1 billion in 2014.

That’s not the only bit of good news we’ve been hearing of late. The NPD Group reports sales of 3D televisions and compatible Blu-ray Disc players surpassed $55 million in the first 90 days since their February introduction. And as of March, consumer electronics sales in general have once again been trending in an upward direction, Shawn DuBravac, chief economist and director of research for the Consumer Electronics Association, told attendees at the opening presentation of the two-day CEA Line Shows event June 22 in New York City.

Of course, our home entertainment business is by no means out of the danger zone. The latest concern I’ve been hearing from studio executives is that catalog sales are down a dismal 20%, TV DVD is a shadow of its former self, and new releases continue to be hit or miss — to the point where Tuesday is easily the most stressful day of the week at the studios.

But at least there’s hope that things will get better. The party may be winding down, but it’s not over.



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