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Home Entertainment Spending Was Flat In Q3 At $3.97B: DEG

You can thank Netflix for helping the home entertainment industry to report the coulda-been-worse numbers for video sales and rentals in Q3. Total consumer spending, at $3.97B, was up 0.05% vs the period last year — even though, The Digital Entertainment Group notes, theatrical revenues for the releases were down 6.4% from last year. Still, the numbers show a $13.5M shift from high-margin sales to low-margin rentals: Total sales (including discs and electronic sellthrough) fell 7.4% to $1.72B while rentals (again, physical and electronic) were up 16.5% to $1.06B. Optimists will find comfort in the digital data. Spending on subscription streaming was +33.1% to $815.2M. That’s probably almost all Netflix; DEG doesn’t include subscription VOD that’s “bundled with other services,” which would knock out Amazon Prime. Studios also should be encouraged by the growth of electronic sellthrough: +46.4% to $273.9M. That’s an acceleration from the quarter last year (+37.7%) and in 2011 (+12.8%). VOD spending at $468M was up 2.8%, a slow down from last year when it was +8.5%. Results continue to look dismal for discs, though. Read More »

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‘Hunger Games’ Sells 3.8M DVD And Blu-rays Its First Domestic Weekend

By | Tuesday August 21, 2012 @ 10:24am PDT

Lionsgate announced today that the home entertainment release of the first installment of its blockbuster franchise The Hunger Games was also the largest digital and on demand launch in the Company’s history, generating the biggest first day sales of any title on Zune Video on Xbox, achieving more first day transactions on Comcast than any title in the past four years and generating record Lionsgate revenue on iTunes. It sold an estimated 3.8 million DVD and Blu-ray units in its first weekend of release, continuing the momentum it demonstrated in generating more than $407 million at the North American box office, the 13th highest grossing North American release of all time. Lionsgate EVP and General Manager of Home Entertainment Ron Schwartz said more than 1/3 of its first weekend units sold in the higher margin Blu-ray format, a remarkably high percentage. The first installment of The Hunger Games franchise has already grossed nearly $700 million at the box office worldwide.

Related: Huge Crowds To Buy ‘Hunger Games’ DVD

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Home Video Spending Up 2.5% In Q1 To $4.45B; Subscription Streaming Soars

By | Sunday April 29, 2012 @ 11:41am PDT

The data out today from DEG: The Digital Entertainment Group may suggest that the period of steep declines in home video spending — largely driven by the collapse of the DVD market — is over. But it also may just reflect the fact that the quarter had more popular movies: Films available on home video in the quarter did 12.5% better at the box office than did comparable releases last year. Whatever the reason, total sales of DVD and Blu-ray discs fell just 0.6% in Q1 to $2.06B; DEG says that Blu-ray now accounts for about a quarter of all disc sales. Throw in the $165M spent to buy digital files of movies and TV shows, and the sell-through market was up 0.5%. Digital vendors really showed their muscle in rentals. Spending on subscription streaming services such as Netflix was up 545.4% to $548.6M while digital VOD from providers including Apple’s iTunes was up 6.8% to $505.3M. Meanwhile, the rash of store closings at Blockbuster contributed to a 29.4% decline in rentals at bricks-and-mortar stores to $305M. And Netflix’s struggles with its DVD business helped to drive a 48.1% slide in subscription disc rentals to $348M. Bricks-and-mortar and subscription DVD rental services now individually do less business than pay TV’s VOD which was up 6.8% to $505.3M. Another winner: kiosk services led by Redbox. Their rocketed 30.1% to $523M. DEG says that consumers opened 2M UltraViolet accounts, … Read More »

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Declining Video Sales Contribute To Lousy 3Q Results At Best Buy

By | Tuesday December 13, 2011 @ 7:08am PST

Best Buy 3Q EarningsConsidering how much of the revenue in Hollywood comes from retail sales and consumer electronics, there’s sure to be some teeth gnashing over the earnings figures out this morning from Best Buy for the quarter that ended in November. Shares in the No. 1 electronics chain are down more than 11% in early trading after it reported net profits of $154M, down 29% from the same period last year, on revenues of $12.1B, up 1.8%. Factoring out a one-time restructuring charge and a gain on an investment sale, earnings came in at 47 cents a share –  below the 51 cents that analysts expected. Best Buy attributes much of the profit drop to declining purchases of digital cameras and game consoles, as well as promotions — including those on Black Friday — to drive sales of tablet computers, TV sets and movies. Still, entertainment sales including music and DVDs fell 9% at domestic stores open 14 months or more. They now account for 13% of Best Buy’s U.S. revenue. Consumer electronics, which represent 35% of Best Buy’s domestic sales, were down 4.8%. The chain had better luck with computers and mobile phones, which represent 40% of sales and were up 8.8%. Read More »

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Home Video Spending Up 4.9% In 3Q

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).

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Report: Blu-ray Sales Falling Short Of Expectations Even As Prices Decline

By | Wednesday June 8, 2011 @ 6:26am PDT

A research report this morning from The NPD Group confirms the prevailing narrative that the home video business is in trouble — although you might miss that if you just look at the upbeat headline on its release: “Consumers Still Positive On Blu-ray.” NPD found that 116 million adults bought a DVD or Blu-ray disc in the six months ending in March, down 9.4% from the same period last year. The firm says Hollywood studios are partly to blame. They released weaker titles in early 2011 vs the same period in 2010. Even so, analyst Russ Crupnick says that “the physical video-disc market was a bit disappointing.” It shows that “Blu-ray may not be the replacement for DVD that many once hoped for.”  NPD played up the fact that 15% of all consumers used a Blu-ray player in the six month period, up from 9% last year. And 22% of all disc buyers bought at least one Blu-ray title. Are consumers warming to the format because of its sharp images and extra features? Crupnick says that’s part of the story: “The fact that prices are now within the budgetary range acceptable to rank-and-file consumers is helping to bolster the overall value proposition of the Blu-ray format,” he says. But 57% of adults still used a standard DVD player, same as in 2010.

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FT: Google Chases Pay-Per-View Dollars

By | Monday August 30, 2010 @ 8:28am PDT
Mike Fleming

The Financial Times is reporting that Google’s YouTube site is negotiating with the Hollywood studios to participate in a pay-per-view site that will be online by year’s end. That puts it in competition with Apple, Hulu and Netflix in trying to corner the market on streaming film and TV shows. It’s an important battle because studios are reeling with the flattening of DVD titles, revenues where studios keep 80 cents of every dollar, and use that windfall to  cushion all its flops. Google plans to charge about $5 for top titles. All this happens while Blockbuster prepares for bankruptcy.

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