Home Entertainment Rebounds, Driven by Online Subscriptions

Todd Cunningham

Online subscriptions are driving a turnaround in Hollywood's slumping home entertainment businesses.

The Digital Entertainment Group, a trade coalition of studios and consumer electronic companies, reports that U.S. consumers spent $4.5 billion on home entertainment in the first quarter this year, an increase of 2.5 percent from the same frame a year ago.

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The figures, from the DEG website, include purchases and rentals of DVDs, Blu-ray discs and online, as well as subscriptions to services like Netflix.

Overall spending on those items declined by 2.1 percent in 2011, to $18 billion. That was the seventh consecutive year of decline, according to the DEG website.

Online subscriptions, such as Netflix, are a major factor in the rebound. Revenue grew five-fold in the quarter, to $548.6 million. Meanwhile, DVD subscription sales fell by $322.8 million in the quarter.

Other takeaways from the report:

>> Blu-ray disc sales surged by 23 percent. The February release of the blockbuster "The Twilight Saga: Breaking Dawn - Part 1" was cited by the group, as were holiday sales of Blu-ray players.

>> DVD sales continued to decline. Packaged good sales, which include both Blu-ray and DVDs, fell by 0.6 percent from a year earlier, to $2.1 billion.

>> Sales of film and TV shows increased by 0.5 percent to $165 million if sales via services including Apple's iTunes service are included.

>> UltraViolet, the studios' cloud-based “digital locker” service, was up to 2 million accounts in the quarter.

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