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Digital drives uptick in homevid biz

Electronic sales, kiosk usage gain popularity

Growth in kiosk usage, as well as increases in digital sales and rentals, boosted the homevideo biz in the U.S. by 1% in the first half of the year, to $8.4 billion.

Biggest gains came from the digital category, which was up 78% to collect $2.4 billion, according to the Digital Entertainment Group. That includes electronic sell through, video-on-demand and subscription-based streaming services.

Studios were particularly pleased with electronic sale of titles, up 22% during the period. Although the revenue is still low at $329 million, the major sees EST as a way to eventually boost profit margins as physical disc sales decline and as usage of the cloud based storage locker UltraViolet increases.

UltraViolet now has more than 4 million accounts registered to access DVDs, Blu-rays and digital purchases, the DEG said.

Still, consumers are increasingly turning to rental options for their filmed entertainment outside of theaters.

Subscription-based streaming and disc delivery rental services, offered by companies like Netflix, rose 13.5% to $1.8 billion during the first half of 2012. The VOD category was up 12% to $984 million, seeing considerable growth in the second quarter, up 17% versus a gain of nearly 12% in the first.

But streaming services rose a whopping 430% during the period to $1.1 billion as more consumers access rentals through mobile devices, videogame consoles and TVs with internet connections.

While kiosk operators saw revenues rise 23% to $990 million during the period, traditional rental stores saw business decline 33% to $598 million. When not factoring in VOD rentals, the overall rental category came in at $2.3 billion, off 26%.

Overall, the physical sale of DVDs and Blu-ray still generate the majority of Holllywood’s homevideo sales, earning $3.7 billion during the six-month period, a decline of 3.6%.

Hollywood continues to see growth in Blu-ray, with the format seeing a 13% increase in sales, although the DEG did not break out sales figures. Sales of older catalog product grew 26% as more studios release higher profile titles from their libraries.

The DEG also said are now 42.1 million Blu-ray compatible devices and nearly 80 million HDTVs in U.S. households.

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