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US home video viewing changing dramatically as DVDs falter

Figures released from the Digital Entertainment Group (DEG) the organization which speaks for DVD suppliers and which monitors shipments, show a rapid

By PETER WHITE

Published: 5 May, 2011

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Figures released from the Digital Entertainment Group (DEG) the organization which speaks for DVD suppliers and which monitors shipments, show a rapidly changing digital video sell thru market in the US – shifting from DVD dominance to online video delivery.

The Q1 US data shows a fall of 20% in DVD shipment revenues of all kinds down to $2 billion (although Blu-ray itself is up); a 36% drop in bricks and mortar video rental (DVDs) and a 33% rise in subscription services (both physical and streaming) and a 30% rise in kiosk rentals. Electronic sell thru and VoD, show modest rises of 10.4% and 8.7% respectively.

The DEG compiles its Home Entertainment Report through its members, tracking sources and with retail input and says that the fall in DVD sales is in part due to the fall by 25% in box-office revenue associated with the DVDs that were released. In other words if this batch of films didn’t do so good in the movies, they won’t be expected to do so well on DVD.

The DEG is perhaps fooling itself when it says that this was all anticipated because the year ago comparison period had four leading films accounting for over $1 billion last year, and that never happened this year. Perhaps it should be asking why those Blockbusters never materialized – is the nature of film-making moving away from the Avatar style blockbuster?

The DEG says that Easter holiday sales were up and that the second quarter is off to a strong start with sell-thru up 20% in the first few weeks, implying that it will recover this year.

Blu-ray Disc sales were up almost 10% in the quarter compared to 2010, which is in line with 13% new players shipping and the installed base rising to 30 million devices. Blu-ray 3D software is also beginning to show signs of material growth, with anticipated retail sales of more than $100 million for the year.

The DEG also said that nearly seven million HDTVs were sold to US consumers in first quarter 2011, up 11% over the first quarter 2010 to reach 64.5 million US homes.

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