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DEG Tracks Home Entertainment Growth

LAS VEGAS — The Digital Entertainment Group, a CE and Hollywood studios-backed home video promotions group, revealed during this week’s International CES that after seven straight years of declines, U.S. home video revenue showed growth from the prior year.

The group cited market research showing a 0.23 percent increase, to $18 billion in the year, following multiple years of shrinking revenue brought on by the declining growth of the aging DVD format. In fact, annual home video revenue dropped $4 billion between 2004 and 2011.

The group said the slight increase marked the eleventh straight year that home entertainment revenue has topped $18 billion and is a sign that business is stabilizing, with the growing popularity of Blu-ray Disc movies and new and better forms of online digital entertainment viewing.

One hybrid vehicle which is being celebrated here this week is the expansion of the UltraViolet virtual content locker system, which lets viewers pay one price for a movie or video and have access to it via multiple streaming devices.

“The increased availability of content, along with a broader range of UltraViolet-enabled services and platforms in the marketplace, contributed to an enormous boost in EST spending for the year,” the DEG said in a statement.

As of June 2012, the number of new UltraViolet accounts more than doubled to over nine million.

Wal-Mart’s Vudu streaming movie service and Best Buy’s CinemaNow service recently announced plans to charge consumers $2 to convert DVDs they own into digital UltraViolet copies from their home computers.

Previously the conversion process required a trip to a Wal-Mart store with a copy of the disc to add a title to an UltraViolet-enabled Vudu account.

Another factor helping to grow home entertainment revenue in 2012 was the increased number of televisions connected to the Internet and the widespread adoption of tablets and smartphones that provide access to such streaming services as Netflix, Vudu and CinemaNow.

Meanwhile, spending on Blu-ray Discs rose 10 percent in 2012, with spending on Blu-ray catalog titles rising 25 percent for the year, the DEG said. However, the disc format’s revenue growth rate was down from 20 percent in 2011.

The number of Blu-ray homes rose 7 percent for the year (including BD set-tops, PlayStation3s and HTiBs.) Total household penetration of all Blu-ray-compatible devices now stands at close to 51 million U.S. homes.

At the same time, consumers purchased more than 39 million HDTVs in 2012, the DEG said. HDTV penetration is now at more than 108.4 million U.S. households.

DVD subscriptions dropped 28 percent in 2012 as kiosk rentals grew 16 percent, down from 31 percent in 2011, the DEG said.

Digital movie purchases rose 35 percent, which was more than three times the rate seen in 2011.

In related news, the DEG announced its slate of award winners from 2012.

DEG established three retailer awards to recognize excellence in merchandising and promoting both new digital entertainment products and Blu-ray Disc and UltraViolet titles during the past year.

Wal-Mart was named the 2012 DEG Retailer of the Year for Hardware, Software and Digital.

The retailing giant was recognized for selling new digital technologies, including its aforementioned Disc-to-Digital UltraViolet program on Vudu, and for continuing to support Blu-ray hardware and software sales.

Wal-Mart was also recognized for the display and promotion of packaged initiatives.

The group’s annual Emiel N. Petrone Innovation Awards recognized the Oppo BDP-105 Blu-ray Disc player as the best physical media product of 2012, Amazon’s Kindle Fire HD as the best digital media product, and the Sony XBR-84X900 4K Ultra HDTV as the most innovative home entertainment product.

For creative excellence in Blu-ray Disc titles, The DEG presented awards to Disney’s “The Avengers” for theatrical title of the year; Universal’s “The Alfred Hitchcock Collection” for classic title of the year; Sony Pictures’ “Neil Young Journeys” for music title of the year; Paramount’s “Hugo” for 3D title of the year; and Warner Bros. Home Entertainment’s The Dark Knight Rises for second screen app of the year.