So much for the high-def discs that studios once hoped would revive home entertainment. Consumers bought about 124M Blu-ray discs in the U.S. last year, + 4.2% vs 2012, research firm IHS Technology reports this morning. But with prices falling, consumer outlays only increased 2.6% — not nearly enough to compensate for the 13.6% drop in DVD sales. If the trend continues, then it could result in “a downward turn in spending for the [Blu-ray] format in 2014,” says Senior Analyst Michael Arrington. “In any case, any reasonable amount of growth in Blu-ray is unlikely to prevent what will next year become a decade of decline for a once-thriving disc market.” IHS says that total spending on home entertainment sales and rentals increased 0.7% to $18.29B in 2013, a slower pace than in 2012 when the total was +3.1%. (The market peaked in 2004 at $21.9B, when discs accounted for 96% of home entertainment spending.) The results are especially disappointing, Arrington notes, considering that “2013 was another record year for the theatrical box office.” Disc sales fell 9.3% to $7.47B while disc rental spending declined 8.8% to $4.27B. That was slightly outweighed by increased Internet business. Movie and TV online sales were +38.7% to $1.31B, with rentals +39.6% to $600M, and subscription revenues +31.4% to $3.17B. Pay TV video on demand was up 0.7% to $1.48B.
By DAVID LIEBERMAN, Financial Editor | Thursday January 16, 2014 @ 11:32am ESTTags: Blu-ray Disc, DVD, Home Entertainment
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