DEG: Blu-ray Spending Up, But Home Entertainment Lower

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Los Angeles - The Digital Entertainment Group's (DEG) Mid-Year 2011 Home Entertainment Report indicates that Blu-ray Disc spending is up more than 10 percent, and overall consumer spending on home entertainment is down 5 percent.

That is despite a 16 percent drop in box office for titles that entered the home entertainment window in the first half of 2011.

DEG said this is notable because comparisons to last year's sales are so highly skewed by the April 2010 release of Twentieth Century Fox Home Entertainment's "Avatar," Hollywood's all-time box-office hit. In the second quarter of 2010 alone, "Avatar" sold more than 12 million discs.

"While ‘Avatar' 's phenomenal success a year ago makes for tough comparisons, the underlying numbers in the latest quarter showed encouraging signs," DEG said. Among the trends:

  • Higher-margin products like Blu-ray, electronic sell-through and video-on-demand (VOD) are all in growth modes, with spending on Blu-ray up more than 10 percent, electronic sell-through up 4 percent, and VOD up 4 percent over the same period last year. In total, digital transactions were up more than 5 percent over a year earlier.
  • While first-quarter 2011 home entertainment spending was down 6.4 percent, second-quarter spending was down only 3.6 percent, which is an especially impressive improvement considering the absence of "Avatar," and a further indication of stabilization.
  • Meanwhile, with many Blu-ray Disc players now affordably priced at or below $100 and built for versatility so that they play existing DVDs and stream content, more homes than ever are now Blu-ray ready.
  • In the second quarter, the number of Blu-ray homes grew 16 percent over 2010 (inclusive of BD set-tops, PS3s and HTiBs,) bringing the total household penetration of all Blu-ray compatible devices to more than 31.6 million U.S. homes. This makes Blu-ray one of the fastest-growing new technologies in the home entertainment industry, DEG indicated.
  • Further, 4.7 million HDTVs were sold to U.S. consumers in second quarter 2011. While flat over the first half last year, HDTV penetration to date is now at more than 66.8 million U.S. households.
  • DEG said the industry continues to manage the changes occurring in the marketplace and consumers can expect to see a number of initiatives, including Ultra Violet and Disney Studio All Access, along with applications that have yet to be announced from retailers, e-tailers as well as other studios in the coming year designed to improve the digital experience and increase the value of ownership.

DEG added that with "the enormous slate of theatrical blockbusters" coming to home entertainment in the third and fourth quarters, including "Transformers: Dark of the Moon," "Harry Potter and the Deathly Hallows: Part 2," "The Hangover Part II," "Pirates of the Caribbean: On Stranger Tides," and "Fast Five," "the industry is extremely optimistic about the second half of the year."


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