Home Entertainment Spending Jumps 5 Percent in First Quarter of 2013


Consumer spending on home entertainment rose more than 5 percent in the first quarter of this year, egged on by a strong slate of theatrical titles becoming available on disc and through digital distribution.

Consumers spent an estimated $4.69 billion on home entertainment purchases and rentals between Jan. 1 and March 31, 2013, up from $4.46 billion in the first three months of 2012, according to numbers released this morning by DEG: The Digital Entertainment Group.

For studios, the big news was a rebirth in disc sales, which have been trending downward for more than five years. Buoyed by a 28.5 percent increase in Blu-ray Disc sales, overall packaged media sales were up 2.12 percent, to $2.1 billion from  $2.06 billion in the first quarter of 2012. Add in electronic sell-through, which grew 51.5 percent in the first quarter to $231.2 million, and the total sell-through pie grew 4.9 percent.

The surprisingly strong growth of electronic sell-through, or EST, can be attributed largely to increased access to digital content. Credit for this, observers say, goes to UltraViolet, which ties in physical disc sales with digital sales and has been embraced by leading retailers like Walmart and Best Buy. Consumers buy a disc and can then access that content anywhere, at anytime, on a wide array of devices, including smartphones and tablets. The success of UltraViolet appears to have broken Apple's grip on the EST market and positioned it for much broader acceptance.

Sales of new release product grew 12 percent, according to DEG numbers, which are compiled using studio data and retailer input. Sales of new releases on Blu-ray Disc were up 37 percent. Sales of catalog titles on Blu-ray were up 16 percent from the first quarter of 2012.

The rental sector didn't fare as well in the first quarter of 2013, with physical disc rentals down 11.9 percent to an estimated $1.04 billion.

Total consumer spending on digital content consumption was up 26.2 percent, to $1.56 billion, buoyed by healthy gains in not just EST but also video-on-demand (up 15.73 percent to $614.9 million) and subscription streaming (up 29.35 percent to $709.6 million).

Meanwhile, data from DEG's consumer electronics members shows that despite the trend toward distribution the number of Blu-ray homes continues to grow, with 3.2 million players sold in the first quarter (including BD set-tops, PS3s and HTiBs). Nearly 60 million U.S. homes now have at least one BD player.

Consumers also bought 9.4 million HDTVs in the first quarter of 2013, DEG data shows, bringing the total number of HDTV households in the United States to more than 112.6 million.

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