DEG: Home Entertainment Saw Q1 Decline

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Los Angeles, Calif. - Spending on home entertainment in the United States over the first quarter of 2011 was down 9.8 percent from the year-ago period, according to a new market report from the

Digital Entertainment Group


The group attributed the decline, in part, to a 25 percent reduction in box-office revenue for titles that became new release offerings for the home in the period.

Title sell-through sank 18 percent for the quarter, but those numbers were impacted in part by the fact that the Easter holiday, which is a revenue generator for disc sales, was not part of first quarter counting this year.

On a positive note, sell-through for the second quarter has started on a positive note, up 20 percent in the first few weeks of the period.

For Blu-ray Disc software sales, consumer spending was up nearly 10 percent over the same period in 2010. Blu-ray 3D software is also beginning to show signs of material growth, with anticipated retail sales of more than $100 million for the year, the DEG said.

Additionally, Blu-ray Disc hardware increased, with sales (inclusive of BD set-tops, PS3s and HTiBs) up more than 13 percent over first quarter 2010.

This brings total household penetration of all Blu-ray compatible devices to nearly 30 million U.S. homes, according to DEG research.

Nearly 7 million HDTVs were sold to U.S. consumers in the first quarter of 2011, up 11 percent over first quarter of 2010.

HDTV penetration life-to-date is more than 64.5 million U.S. households.

The DEG said emerging formats such as digital distribution provided additional growth for the industry with electronic sell-through spending up nearly 11 percent and consumer spend on VOD up 9 percent in the quarter. In total, digital movie transactions were up close to 10 percent over the same period last year.

The home entertainment business continued to evolve in the period with increased enhancements to technologies like Blu-ray Disc, Blu-ray 3D and new digital service offerings appearing in CE devices.

The DEG said all of the factors are aligning for continued strong demand for home entertainment options offering value and convenience.

"Amid the macro-economic challenges we face, the DEG expects a number of growth opportunities for the remainder of 2011, fueled by an impressive array of blockbuster theatrical releases in the third and fourth quarters," stated Amy Jo Smith, DEG executive director. "This will help the industry to round out 2011, with consumer spending flat, or up slightly, and transactions up by the end of the year."


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