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Digital biz earns $1.2 billion in third quarter

Platforms grow 51% in Q3, according to report

Digital platforms continued to pump more coin into Hollywood’s homevideo biz during the third quarter, with the segment growing 51% during the last three months, to earn $1.2 billion, according to a new report released by the Digital Entertainment Group.

The revenue is still less than physical disc sales and rentals, which collected $2.7 billion during the same frame, but digital’s continued growth signals that it’s narrowing the gap as more consumers turn to VOD and other online platforms to access entertainment.

That includes storing purchases in digital lockers through UltraViolet, which now claims 6 million members, the DEG said. Service will become available in Canada during the fourth quarter and may get a bump with Redbox announcing plans to support the technology this week through a new deal with Warner Bros.

Kiosks operated by Redbox and other vendors saw sales decrease 24% to $1 billion, perhaps a sign that inventory delays of at least 28 days by the studios are affecting that area of the rental industry.

Overall, the homevideo industry reported a 1% increase in sales during the third quarter of $3.9 billion.

On the digital front, the electronic sale of films increased nearly 38% during the third quarter to earn $187 million, while VOD rose 8.4% to $455 million. But it was subscription-based streaming services that showed the most gains, up 127% to earn $579 million.

Physical disc sales still continued to grow, with Blu-ray up 13% during the third quarter versus the same year-ago-frame.

Catalog titles, especially grew 22% during the period, as studios released more titles on the format. The results continue the trend of

Around 2.8 million Blu-ray disc players were sold during the quarter, up 5% over last year. That includes Blu-ray devices built into PlayStation 3 videogame console and home theater systems. There are now Blu-ray compatible devices in close to 50 million U.S. homes, and more than 101 million HDTVs in U.S. households, DEG said.

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