Home Entertainment Spending Up for First Time Since 2007

Gains in Blu-ray account for a 1% increase in sales according to data from the first nine months of 2012.

As the crucial fourth quarter gets underway, studio executives and video retailers alike can take heart in the fact that the latest statistics show continued stabilization in consumer home entertainment spending, which prior to this year had been on a steady decline since 2007.

Consumer spending on home entertainment in the first nine months of this year is up 1% from the first nine months of 2011, according to the latest report from DEG: The Digital Entertainment Group.

The lift – which reflects a slight 0.24% uptick in the third quarter after a 1.4% gain at the year’s mid-year mark – is once again attributed to gains in Blu-ray Disc sales, subscription streaming and electronic distribution.

Meanwhile, DEG reports that UltraViolet registrations have surpassed 6 million. UltraViolet – a studio-backed initiative to boost discs sales by providing disc buyers with a “digital locker” to store their purchased content in the cloud – continues to roll out into other countries, with Canada up next before the end of this year.

As of Sept. 30, 2012, consumers this year have spent an estimated $12,342,020,000 on home entertainment, up from $12,215,030,000 in the same period last year.

Packaged-media sellthrough spending for DVD and Blu-ray Disc combined is pegged at $5,401,910,000 down from $5,612,860,000 in the first nine months of 2011 – a drop of just 3.8%, a far cry from the double-digit drops the industry saw in prior years.

Factor in electronic sellthrough and the dropoff dwindles to 1.7%, with EST spending rising from $406,220,000 in the first nine months of 2011 to $516,550,000 in the same period this year – a gain of 27%.

Blu-ray Disc spending continued to post significant gains, rising 13% in the third quarter alone. Sales of catalog titles fared ever better, rising 22% between June 1 and Sept. 30, 2012, from the comparable period a year ago.

Subscription streaming spending nearly tripled, from $463,560,000 in the first nine months of 2011 to $1,682,710,000 in 2012 as of Sept. 30.

That more than made up for huge drops in disc rental, both in brick-and-mortar stores (down 29.3% so far this year) and via subscription (down 50.4%).

Factor in an 18.5% bump in year-to-date kiosk rental spending – mostly on Redbox – and the video rental category as a whole - including all subscription, both streaming and physical disc - saw spending rise 3.7% to $6,423,570,000 in the first nine months of this year.

The DEG report says there were 2.8 million Blu-ray Disc players (including BD set-tops, PS3s and HTiBs) sold in the third quarter, up 5% from a year earlier. Total household penetration of all Blu-ray compatible devices now stands at close to 50 million U.S. homes.

In the third quarter, 7.8 million HDTVs were sold to U.S. consumers. HDTV penetration to date is now at pegged at more than 101 million U.S. households.

DEG numbers are compiled using information and statistics provided by DEG members, various tracking sources and retail input.