Blu-ray, VOD, digital distribution pump sales

Hollywood’s homevideo biz grew 2.5% during the first quarter, driven by stronger sales of Blu-ray discs, a growth in digital sales and VOD, although rentals remained strong through kiosks.

During the three-month period, homevid generated $4.5 billion in sales overall, according to the Digital Entertainment Group. Sales of entertainment surpassed rentals — $2.2 billion vs. $1.7 billion.

The biggest gains during the three-month period came from subscription-based streaming services from companies like Netflix, which saw sales surge 545% to $549 million. Netflix saw revenue from its subscription-based disc-by-mail service fall 48% to $348 million.

Kiosks operated by Redbox and others earned $523 million, growing 30% for the rental category. VOD improved 7% to collect $505 million in rental fees.

The shuttering of more Blockbuster outlets caused in-store rentals to decline another 39% to $305 million.

However, Blu-ray was up 23%, with sales of older catalog titles growing 27%, and TV shows on Blu-ray improving 54% during the quarter. Blu-ray discs now represent a quarter of all disc sales.

An estimated 2.4 million Blu-ray players sold in the first quarter, with the tally including PlayStation 3 gaming consoles and home theaters in a box units. There are now 40.8 million Blu-ray devices in U.S. homes.

The sales figure are a good sign for the studios, which are looking for ways to encourage more consumers to purchase rather than rent films and TV shows. The DEG said the results reflect “the continued stabilization of the industry.”

As studios put more promotional muscle behind digital locker service UltraViolet this year, the majors are hopeful that the electronic sell-through category will continue to grow; it was up 17% during the period to earn $165 million. More than 2 million UltraViolet accounts have now been created.

During the same frame, 6.5 million HDTVs were sold in the U.S., with more than 77.6 million U.S. households own an HDTV set.

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