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DEG: Blu-ray Player Sales Up 13%

Los Angeles –
More than 3.3 million Blu-ray Disc players shipped to dealers through
the first three quarters of 2009, up 13 percent over the same period last year,
while BD software sales were up 83 percent for the year, according to figures
gathered for the Digital Entertainment

The figures – which the DEG based on data from the Consumer Electronics
Association (CEA), retailers and manufacturers through the first three quarters
of 2009 – showed that Blu-ray Disc set-top player sales grew 112 percent over the
same period last year.

Total Blu-ray playback device households in the U.S. are nearly
11.7 million, including PlayStation3 consoles, along with a variety of set-top
players that are available as either stand-alone models or combined with home-theater

Approximately 80 percent of Blu-ray devices are BD-Live capable,
the DEG reported.

“We’re enthusiastic about the continued promise of Blu-ray Disc,
with more entry-level players coming to market and the upcoming strong slate of
box-office blockbusters,” stated Amy Jo Smith, DEG executive director. “As we
head into the all-important fourth quarter, we believe the power of some of the
year’s biggest titles like ‘Transformers: Revenge of the Fallen’ (Paramount
Home Entertainment); ‘Harry Potter and the Half-Blood Prince’ (Warner Home
Video); ‘Up’ (Walt Disney Studios Home Entertainment); and ‘Ice Age: Dawn of
the Dinosaurs’ (20th Century Fox Home Entertainment) will prove extremely
popular with Blu-ray enthusiasts.”

According to figures compiled from the DEG data, approximately 4 million
HDTVs were sold to consumers in the third quarter of 2009 and nearly 12 million
sold in the first three quarters of the year.

Household penetration of HDTVs in the U.S. is nearly 45 million,
representing almost 40 percent of all U.S. households. Approximately 29 percent
of all HDTV owners have more than one set, according to the DEG numbers.

The DEG said consumer spending on prerecorded home entertainment
media for the third quarter of 2009, which includes DVD, Blu-ray Disc and
digital distribution, was off slightly at $4 billion, down by 3.2 percent
compared with the same period last year.

However, the DEG said consumer transactions for all home
entertainment products were up 6.6 percent for the third quarter compared to
the same period last year.

Overall, the DEG said home entertainment continues to show
ongoing stability given the current economic environment.

Although consumer spending on sell-through packaged media was
down 13.9 percent in the third quarter, Blu-ray was up 66.3 percent to $161
million compared to the same period last year (up 83 percent year-to-date to
$568 million).

Digital distribution (including both video-on-demand and
electronic sell-through) was up 18 percent for the quarter to $420 million (up
20 percent year to date to $1.4 billion). Furthermore, according to Rentrak’s
Home Video Essentials, rental spending was up 9.9 percent for the quarter, with
Blu-ray rental spending up 44.5 percent.

“We are pleased to see an uptick in the number of consumer
transactions, indicating a continuing strong demand for home entertainment
product,” said Ron Sanders, president of both the DEG Warner Home Video. “We
are also encouraged by the dramatic growth of Blu-ray and the increases in
digital distribution and rental in the third quarter.”

Blu-ray, proving to be home entertainment’s standout performer in
2009, is accounting for 12 percent of all theatrical new release sales in the
third quarter.

The year’s best selling Blu-ray Disc title “X-Men Origins:
Wolverine” (20th Century Fox Home Entertainment) and “Watchmen” (Warner Home
Video) have each approached or surpassed 30 percent of consumer spending on
Blu-ray Disc.

“Titles that appeal to the early adopter demographic continue to
perform increasingly well on Blu-ray, representing upward of 20 percent of all
physical media sales,” said Bob Chapek, chairman, DEG, and president, Walt
Disney Studios Home Entertainment. “As the penetration of Blu-ray increases, we
are beginning to see the same kind of response by mainstream audiences that we
are seeing in early adopters.”

The DEG compiles quarterly sales data for various products within
the home entertainment category, including Blu-ray, DVD and HDTV. The industry
association compiles its data based on input from member companies, retailers
and industry association tracking sources.

According to figures compiled by Swicker and Associates on behalf
of the DEG, more than 17 million Blu-ray Discs shipped to retail in the third
quarter of the year, an increase of 35 percent over the same period last year.

As for DVD devices, the DEG data with input from the CEA,
manufacturers and retailers, indicated some 4.6 million DVD players sold to
U.S. consumers in the third quarter of 2009.

Since launch in spring 1997, approximately 267 million DVD
players – including set-top and portable DVD players, home theater in a box
systems, TV/DVD and DVD/VCR combination players – have sold to consumers,
bringing the number of DVD households to more than 92 million (adjusting for
households with more than one player).

The DEG estimated that 66 percent of DVD homes have bought more
than one player.