Blu-ray boosted Hollywood’s homevideo biz in 2011, growing 20% to top $2 billion in sales for the first time since its launch in 2006.
Overall spending for the home entertainment category was slightly down 2% for the year, generating $18 billion, but the industry’s sales performance clearly stabilized in 2011, the DEG said.
Total consumer spending on home filmed entertainment for the second half of the year rose nearly 1% to $9.7 billion, driven by a strong third quarter that was up 5%, the first quarterly increase since 2008.
More than 100 UltraViolet titles will be available from the major studios this year that enable consumers to access the films from the cloud to play on electronic devices registered with the digital locker. The first titles became available last year through Sony Pictures Home Entertainment, Universal Studios Home Entertainment and Warner Home Video. Lionsgate and Paramount Home Media Distribution launch their first titles this year.
On the 3D front, sales of 3D Blu-ray discs have also started to find some traction, with available titles more than tripling in 2011, growing from 20 to 65, while unit sales increased more than six times in the same period.
Films available as 3D Blu-rays include Fox’s “Avatar,” Disney’s “The Lion King,” “Cars 2” and “Pirates of the Caribbean: On Stranger Tides.”
— Total Blu-ray penetration in 2011 jumped 38% (including BD set-tops, PS3s and home theater units) with total household penetration of all Blu-ray compatible devices now at nearly 40 million U.S. homes.
There are now 40 million devices that can play Blu-ray discs in homes, up 38% compared to 2010, according to the Digital Entertainment Group, whose annual sales figures were released Tuesday from the Consumer Electronics Show in Las Vegas.
The sale of discs fell 13% to generate nearly $9 billion, primarily because of slower DVD sales. On the rental side, traditional retail outlets took the biggest hit last year, dropping 29% to earn $1.6 billion. Kiosks, operated by Redbox and other vendors, showed the most growth in the category, up 31% to collect $1.7 billion in fees. The DVD-by-mail biz still saw 4% growth last year, earning $2.4 billion.
Any sign of growth — especially when it comes to disc sales — is good news for studios as they look to keep their homevideo businesses healthy through any means necessary. More recently, that’s included creating longer windows between when new titles are available to rent through Netflix, Redbox and Blockbuster after they hit store shelves to purchase; and embracing digital locker services like UltraViolet to encourage sales.
Warner Bros. used CES to confirm that it had locked down a new deal with Netflix to push the delay for new releases from 28 days to 56 days. Netflix said the deal would ensure its members “have continued to secure access to Warner Bros. DVDs and Blu-ray discs,” while giving Netflix a discount to supply those discs to members.
“Since we implemented a 28-day window for subscription and kiosk, we have seen very positive results with regard to our sell-through business,” said Mark Horak, president, Warner Home Video North America. “One of the key initiatives for Warner Bros. is to improve the value of ownership for the consumer and the extension of the rental window – along with our support of UltraViolet – is an important piece of that strategy.”
The top selling Blu-rays of the year were Warner Bros.’ “Harry Potter – Deathly Hallows, Part 1,” “Harry Potter – Deathly Hallows, Part 2,” Disney’s “Tangled” and “Cars 2,” Paramount’s “Transformers – Dark of Moon,” Universal’s “Bridesmaids,” Fox’s “Rio,” “DreamWorks’ “The Help,” Disney’s “Lion King” and WB’s “Hangover Part 2,” according to Nielsen VideoScan First Alert. Five of the titles sold more than two million discs.
Other findings by the DEG:
— Electronic sell through (EST) was up 9% for the year to earn $554 million.
— VOD rose another 7% to $1.86 billion.
— Subscription-based streaming services like Netflix generated $993.6 million.
— Both new release and catalog sales of Blu-ray titles saw double digit growth of 20% in 2011.
— There are now more than 74.5 million U.S. households with HDTVs; more than 27 million HDTVs were purchased in the U.S. in 2011.