By a hair, I mean a 1.4% gain in total consumer rental and purchase spending to $8.4B, according to data released today by DEG: The Digital Entertainment Group. Netflix and, to a lesser extent, Amazon and Hulu Plus deserve most of the credit for the uptick: Spending on subscription streaming services was up 430.2% to $1.1B, accounting for 13.1% of all home video spending in the period. That outweighed the impact of Netflix’s diminishing promotion of subscription DVD rentals. Spending in this category was -50.4% to $671.9M. Consumers also spent more for streaming subscriptions than they did to rent discs at kiosks, almost exclusively Redbox now that it has bought NCR’s Blockbuster Express machines: The kiosk business was up nearly 23% to $990.5M. The other notable gain in rentals was in VOD, up 11.6% to $983.6M. Rentals at brick-and-mortar stores fell 33.4% to $597.5M.
Related: Consumers Poised To Pay More For Web-Delivered Video Than For Discs: Report
But the report shows that the industry is still suffering from consumers’ cooling desire to own DVDs. DEG offers a single number for DVD and Blu-ray disc sales — packaged goods collectively were down more than 3.6% to $3.7B. (That’s an improvement from the first half of 2011 when packaged goods sales declined 18.3%.) The industry group makes it clear that DVDs are to blame. It says that consumer spending to own Blu-ray discs was up 13.3% vs a dollar number … Read More »
The industry’s Digital Entertainment Group credits a 58% gain in spending on Blu-ray discs vs last year’s 3Q and a 12.8% pickup in electronic sell-though (to $135.9M) for much of the gain in 3Q consumer spending, to $3.93B. The 4.9% improvement in total sales was “a major milestone,” DEG says, because “this is the first time spending has increased since the first quarter of 2008, when the economic downturn began.” This also was the first time DEG broke out spending numbers for subscription streaming services such as Netflix, formerly folded into the tally for rentals: They accounted for $255.4M in the quarter and $463.6M for the first half of 2011. But the results show that DVD sales continue to plummet: The huge gains for Blu-ray weren’t sufficient to stop the decline packaged goods sales, down 4% to $1.74B. Over in the rentals, subscription services for discs — again, like Netflix — led the pack (+4.9% to $607.3M). But video-on-demand came in second (+4.9% to $419.9M), followed by kiosks (+23.3% to $414M) and bricks-and-mortar stores (-28.6% to $353M).
The bottom seems to have fallen out of the DVD market according to a startling report out this week from SNL Kagan. The research firm says that studio shipments of DVDs fell 43.8% to 226 million discs last year. Wholesale revenues fell about the same amount, 43.9%, to $4.47 billion. The study compared 415 titles released in 2010 to 352 in 2009. Helped by Avatar, Fox accounted for 13.6% of the 2010 wholesale revenues. That barely beat Warner, which had 13.5% of the market, closely followed by Disney with 13.4%. “Consumers are now opting to sign up for streaming and-or rental services such as Netflix,” analyst Wade Holden wrote. “They are using video-on-demand services more and more as they discover these services can be cost-effective.” His study did not look at sales of Blu-ray discs. It also doesn’t appear to square with the home video industry’s year-end data. DEG: The Digital Entertainment Group said that studios shipped “more than 1 billion DVD units” in 2010 as well as in 2009. DEG pegged total U.S. spending on DVD sales and rentals at $14 billion last year, down 11.4%. But with Blu-ray and digital, total home video spending was down 3.1% to $18.8%, it said.