- Share this article on Facebook
- Share this article on Twitter
- Share this article on Flipboard
- Share this article on Email
- Show additional share options
- Share this article on Linkedin
- Share this article on Pinit
- Share this article on Reddit
- Share this article on Tumblr
- Share this article on Whatsapp
- Share this article on Print
- Share this article on Comment
Consumer spending on home entertainment finished the year essentially flat with the previous year, with a total of $18.2 billion spent in 2013 on packaged media (Blu-ray Disc and DVD) and the various incarnations of electronic delivery.
That’s up less than 1 percent from total consumer spending in 2012.
Disc purchases for the year were down 8 percent to $7.78 billion from $8.47 billion in 2012, according to numbers provided by the studios and key retailers and released this morning by The Digital Entertainment Group (DEG). Even the generally robust fourth quarter witnessed a decline of 9.3 percent in spending, to $2.77 billion, although observers attribute this to massive discounting around the Thanksgiving holiday, with DVDs as well as Blu-ray Discs widely available for a few dollars. (DEG did not provide unit sales this year.)
STORY: Why 2013 Was the Year of Digital HD
DVD sales continued their steady decline, while Blu-ray Disc sales, after a slight drop in the third quarter, finished 2013 5 percent ahead of 2012.
But a steep increase on the digital side saved the day, with total consumer spending on digital content up 23.9 percent to $6.46 billion, from 2012’s $5.22 billion. Leading the charge was electronic sell-through (EST), now rebranded as Digital HD, which saw a 47.1 percent increase in consumer spending to surpass $1 billion for the first time ever. According to DEG, consumers shelled out $1.19 billion on movies and TV show downloads in 2013, up from $808.42 million in 2012.
Driving Digital HD sales was the policy adopted by most studios in 2013 of releasing new titles two weeks earlier than their disc or VOD release — a policy change Universal Studios Home Entertainment president Craig Kornblau calls “a game-changer.” Further boosting Digital HD sales was a dip in pricing and much greater availability, thanks to new platforms such as Comcast’s digital movie storefront, launched in November, and Target Ticket, a digital store that was opened in September by the nation’s No. 2 discount retailer, Target Corp. — as well as new media hub consoles like Microsoft’s Xbox One and Sony’s PlaysStation 4, both of which hit the market in November.
PHOTOS: Todd McCarthy Names the 10 Best Films of 2013
Digital HD wasn’t the only digital component to post significant growth in 2013. Consumer spending on VOD was up 4.8 percent to $2.11 billion from $2.01 in 2012, while subscription streaming — a market segment led by Netflix – rose an estimated 32.1 percent to $3.16 billion from $2.39 billion in 2012.
The number of Blu-ray homes continues to grow, with total household penetration of all Blu-ray-compatible devices (including BD set-top players, PlayStation machines and HTiBs) now at more than 72 million U.S. homes.
The year-end DEG report also found that:
- There are now more than 15 million UltraViolet accounts, thanks in large part to support from most major retailers.
- Consumers bought more than 38 million HDTVs in 2013. HDTV penetration is now at more than 96 million U.S. households, according to numbers compiled by DEG from retail tracking sources.
- Traditional physical rental continued to decline in the double digits. Rental revenue at brick-and-mortar stores decreased 14.3 percent during 2013 to $1.04 billion, down from $1.22 billion in 2012 — not surprising, given the fact that by the end of the year the 300 remaining Blockbuster video stores had nearly all closed. Meanwhile, subscription rental, again mostly through Netflix, was down 19 percent to $1.02 billion, compared to $1.26 billion last year.
- Kiosk activity, dominated by Redbox, was flat, coming in at an estimated $1.92 billion, a slight drop of 1 percent from $1.94 billion in 2012.
THR Newsletters
Sign up for THR news straight to your inbox every day