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Digital Video Spend Hits $2.1B In Q1: DEG

Los Angeles – Consumer spending on digitally-accessed video content rose 14.2 percent in the first quarter of 2015, to more than $2.1 billion.

According to Hollywood trade association DEG: The Digital Entertainment Group, the gains stand in sharp contrast to declines in sales of DVDs and Blu-ray discs, which fell 13.3 percent for the three months ended March 31.

The only bright spot for packaged media came from kiosk rentals, where revenues rose 7.7 percent.

The change in consumer habits is good news for studios, which reap higher margins on digital sales, DEG said.

Leading the digital charge were electronic sales of movies and TV shows, as well as revenue from subscription streaming, both of which rose more than 22 percent year over year. Electronic sell-through hit $430.9 million and revenue from subscription streaming topped $1.1 billion.

Less popular were non-subscription video on demand (VOD) services, which saw a 4.7 percent drop in consumer spend, to $551.7 million in Q1.

The numbers, released in DEG’s quarterly Home Entertainment Report, also reveal that consumers purchased significantly more catalog and family films electronically, and that spending on new theatrical releases rose more than 60 percent.

With declines in packaged media offsetting digital gains, total U.S. home entertainment spending was essentially flat at $4.6 billion, but still outpaced box office sales, which fell 2.8 percent year over year to just under $3 billion.

DEG added that HDTV penetration now stands at nearly 105 million U.S. households, 90 million of which also have Blu-ray playback capacity through dedicated players or gaming consoles.