Home entertainment spending off 4%

Report: Sales totaled $9.73 billion through June 30

The Digital Entertainment Group's midyear report shows consumer spending on home entertainment titles was down nearly 4%, though studios' related profit was off a more modest 2% because of pricing shifts.

The industry group, primarily comprising studios and consumer- electronics manufacturers, said consumer spending on home entertainment titles totaled $9.73 billion through June 30.

Spending on DVDs and Blu-ray Discs was off almost 6%. Disc sales were off almost 14% in the first half, but digital distribution marked a 21% revenue improvement, and overall rental spending climbed 8%.

Blu-ray rentals marked a particularly big first-half uptick, at 62%. DEG said the second-quarter picture turned out to be brighter than the more downbeat first three months of the year.

Unit sales of DVD-related hardware rose nearly 4% in the first half, DEG said.

"Despite an extraordinarily challenging marketplace, the home entertainment sector continues to be remarkably stable overall, particularly with the growth of higher-margin businesses like Blu-ray and digital distribution," DEG and Warner Home Video president Ron Sanders said. "While home entertainment is down compared to last year, the growth we saw in the second quarter is encouraging."

DEG noted that U.S. consumer spending was down 2% in the first half and monthly retail sales down 10% in May.

"The overwhelming satisfaction expressed by consumers with regard to Blu-ray shows great promise to the industry's economic future, and we are also optimistic regarding their appetite toward digital technologies," said Bob Chapek, DEG chairman and president of Walt Disney Studios Home Entertainment. "Both formats, converging together and resulting in one cohesive consumer experience, will present an opportunity for the industry to return to growth and eclipse our previous benchmarks."