Home entertainment biz mostly down

Blu-ray, digital distribution provide twin bright lights

Blu-ray and digital distribution were small bright spots in an otherwise gloomy first quarter report on the home-entertainment biz.

Just-released numbers from trade org Digital Entertainment Group indicate that overall consumer spending on pre-recorded home-entertainment content dropped by 8% to $4.8 billion compared to the same period last year. The number represents the aggregate of DVD, Blu-ray and digital distribution.

Taking rentals as a separate category, the DEG report says they declined by a surprising 14% in the first quarter of this year. The drop is surprising considering that rentals were hailed last year as an island of growth in a declining homevid market because the recession was said to encourage frugal consumer habits. However, low-priced rentals through kiosks like Redbox could be driving down rental revs.

Sell-through numbers were also off for the quarter. They declined by 11%, coming in at over $2.5 billion.

Per DEG, the drop in rentals is largely “a result of brick-and-mortar store closures.” The org added that the new overall numbers are skewed by the liquidation of chain retailer Circuit City in first quarter 2009, which dumped a large quantity of DVD and Blu-ray titles onto the market.

Bucking the downward trend, the Blu-ray disc biz grew in the first quarter, with sell-through up 74% and rentals up 36%, compared to the same period last year. Some 34 million Blu-ray discs shipped to retail in the quarter, and household penetration of Blu-ray devices — including players, PC drives and PlayStation 3 consoles — stands at 18 million U.S. homes.

Also on the upside, digital distribution, which includes download purchases and VOD, grew a combined 27% to $617 million in the first quarter compared to the same period last year.

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