M&E Daily

Digital Distribution Edges Blu-ray In First Half

Digital distribution platforms for home entertainment (including video-on-demand) outpaced Blu-ray Disc in consumer spending during the first half of 2010, passing the $1 billion mark for the first time, according to new figures released by DEG: The Digital Entertainment Group.

Electronic sell-through increased up 37% year-over-year to $285 million between January and June, as video-on-demand (VOD) rose 19% to $865 million, for a combined growth of 23% to $1.1 billion.

Sales and rentals of Blu-ray discs, reached a combined total of $982 million for the six-month period. Blu-ray sell-through increased 84% year-over-year to $733 million during the half.

Blu-ray disc shipments topped 77 million units in the first half of 2010, nearly double the number of the comparable period in 2009, according to figures compiled by Swicker & Associates on behalf of the DEG. Household penetration of all Blu-ray compatible devices, including set-top players, PC drives and PlayStation 3 consoles, has now reached 19.4 million U.S. homes.

Overall consumer spending for the first half of 2010 in the home entertainment window for pre-recorded entertainment — which includes DVD, Blu-ray Disc and digital distribution — reached $8.8 billion, off 3% compared to the same period in 2009. Yet consumer transactions for home entertainment products were up 2% for the first half of the year, DEG says.

Packaged media sell-through, which includes DVD and Blu-ray Disc, declined 7% year-over-year during the half. But the rate of decline slowed to 3% during the second quarter.

Rental spending was down nearly 5% to about $3 billion between January and June, says DEG (citing Rentrak Corp.’s Home Video Essentials). The trade group faults Movie Gallery store closures for the decline, while noting that kiosk revenues increased 55% during the six-month period.

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