By Ronald Grover
April 29 (Reuters) – Hollywood may be seeing a turnaround in
a seven-year decline of home video sales, thanks to double-digit
sales growth of Blu-ray discs and online movies, an industry
trade group is expected to announce on Sunday night.
The Digital Entertainment Group, whose members include
studios, consumer electronic companies and others, will report
U.S. consumers spent $4.5 billion on home entertainment in the
first quarter this year, an increase of 2.5 percent compared to
a year ago.
That’s the second quarter of growth in the last three
quarters for home entertainment spending, which includes
purchases and rentals of DVDs, Blu-ray discs and online as well
as subscriptions to services like Netflix. Overall spending
declined on those items by 2.1 percent in 2011, to $18 billion,
the seventh consecutive year of decline, according to data on
the group’s website.
“The business feels as if it has begun to stabilize,” said
Ron Sanders, president of Warner Home Video and DEG president.
“Hopefully, we’ve hit bottom.”
Sales of Blu-ray discs surged by 23 percent, the group said,
spurred by strong Christmas sales of Blu-ray players, continued
video sales of holiday releases like the hit “Kung Fu Panda 2”
and the February release of the blockbuster “The Twilight Saga”
Breaking Dawn – Part 1.”
Blu-ray growth partially offset the still steep decline in
DVD sales. Overall packaged good sales, which include both
formats, fell by 0.6 percent from a year earlier, to $2.1
billion.
Sales of films and tv shows increased by 0.5 percent if
sales through electronic outlets such as Apple’s Itunes service
are included. Consumers purchased $165 million of those
so-called electronic sell through products.
The industry’s largest growth engine continues to be online
subscriptions, such as those offered by Netflix, which grew
five-fold in the quarter, to $548.6 million.
Most of that online subscription growth appears to come from
Netflix customers who chose to convert their subscriptions to
streaming over its traditonal DVD by mail service when the
company split the methods last year. Nationwide, DVD
subscription sales fell by $322.8 million in the quarter.
Industry officials expressed optimism that the growth will
continue, based on continued sales of Blu-ray players and
introduction of the studio-backed UltraViolet service by which
consumers can buy movies that are shared among several
cloud-connected devices. Nearly 2 million users have signed up
since the serviced was introduced late last year, DEG said.
“We believe we’re at an inflexion point,” said David Bishop,
president worldwide Sony Homwe Entertaintof Sony Worldwide Home
Entertainment CKIT. “We’ve created an installed base that we
think will continue to give us this momentum.”
