Homevid spending dips, but digital gains

Blu-ray and digital distribution have been relative bright spots in an otherwise drooping home entertainment market, according to the latest numbers from Digital Entertainment Group.

Consumer spending for the first three quarters of 2010 in the home entertainment arena for all pre-recorded entertainment — which includes DVD, Blu-ray discs and digital distribution — stood at $12.6 billion, off 4% compared to the same period last year, per the industry org’s third-quarter report.

The packaged-media sell-through market, including DVD and Blu-ray, declined 8%, although the Blu-ray component of sell-through was up 80%, having risen to $1 billion year-to-date.

Also up was digital distribution, which includes electronic sell-through (EST) and video-on-demand (VOD). Year-to-date they have accounted for 13.5% of the overall consumer spend in home entertainment, with EST climbing 37% to $432 million and VOD up 20% to $1.2 billion — a combined growth of 23% to $1.7 billion.

Taking these gains in digital distribution into account, the real decline in overall sell-through was 6% rather than 8%, according to DEG.

In the rentals arena, spending was down 4.4% to $4.4 billion year-to-date, according to Rentrak, one of DEG’s data sources. However, Blu-ray rental spending rose 40%, and kiosk revenue, including DVD and Blu-ray, increased 55%.

In hardware, Blu-ray was again the bright spot. While consumer sales of home entertainment products were flat, Blu-ray hardware sales continued to climb in the first three quarters, selling more than 3 million set-top units, an increase of 104% for the period.

This brings the total installed base of Blu-ray Disc playback devices in the U.S. to 21.1 million units.

“While we continue to encounter tough market conditions, there are a number of positive trends emerging, particularly in some of the industry’s key growth areas,” said DEG prexy Ron Sanders, who’s also topper at Warner Home Video.

DEG compiles its data based on input from member companies, retailers and industry association tracking sources.

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