Report: Home entertainment spending falls, though Blu-ray doing well

By Trevor Mogg August 5, 2011

Overall spending on home entertainment in the US dropped in the last 12 months according to an industry group report, partly as a result of people tightening the purse strings as the world economy remains in the doldrums.

The Digital Entertainment Group, a body made up of 70 companies such as Walt Disney, Time Warner and Samsung, released its mid-year home entertainment report on Friday.

Figures from the report show that the amount spent on items such as DVDs, video-on-demand services and online streaming dropped 5 percent to $8.3 billion in the first six months of this year compared to the same period a year ago.

According to Reuters, a weaker movie selection compared to that of a year ago was a factor in the fall. Also, the sales of one single movie in 2010 skewed figures, DEG said. Avatar sold a phenomenal 12 million discs in the space of just three months last year.

While sales of Blu-ray and DVD discs together fell by 18 percent in the first six months of 2011 compared to a year earlier to $3.9 billion, Blu-ray itself provided some good news for the industry – sales of those discs increased by 10 percent, with consumers attracted by the high quality images Blu-ray offers.

Ron Sanders, president of Warner Home Video commented on the Blu-ray figures, saying, “It’s getting very well-established in households. Consumers are getting more and more comfortable with buying Blu-ray.”

The increase in sales of Blu-ray discs has been helped by the drop in prices for the players, with many now available for under $100.

DEG’s executive director Amy Jo Smith tried to put a positive spin on the figures. She said the fact that consumer spending fell 6.4 percent in the first three months of the year and 3.6 percent in the second demonstrated “a stabilization and improvement in the market.”

Officials also commented that a slew of popular movies coming to disc in the next six months could help improve the home entertainment business, much in the same way that Avatar helped a year ago.

Subscription rentals via the likes of Netflix are doing well – they increased by a notable 46 percent over a year ago.

So while it seems there are encouraging signs in some parts of the home entertainment business, growth depends largely on the industry making movies people want to watch, as well as the condition of the global economy.

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