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Home Entertainment Spending Up 5% in Q3

Struggling sector reports its first growth since the first quarter of 2008, Digital Entertainment Group reports

The home entertainment business reported its first quarterly growth in more than three years, expanding 5 percent in the third quarter, the Digital Entertainment Group reported Monday.

The trade group attributed the uptick to growth in both Blu-ray Disc and electronic sell through revenue. Sales of the high-definition discs grew 58 percent from the third quarter of 2010, the DEG said, while digital movie sales grew 13 percent.

The studio-sponsored trade group did not provide revenue figures.

It's the first time the struggling home entertaiment business has reported growth since the first quarter of 2008.

Here's the full DEG press release:


Third quarter home entertainment spending rises 5% 

Increase is first since 2008’s first quarter when recession was taking hold; Number of Blu-ray homes jumps 52% from year-earlier to 33.5 million 

The third quarter 2011 results mark the continued stabilization of the industry, underscored by significant gains in Blu-ray Disc and solid increases in electronic sell-through (EST) spending. This growth reflects an encouraging shift in the marketplace as we head into the all-important fourth quarter. 

Overall consumer spending jumped nearly five percent compared to the third quarter a year earlier, marking a major milestone, as this is the first time spending has increased since the first quarter of 2008 when the economic downturn began. 

There were a number of promising trends in the third quarter, signifying an ongoing, healthy consumer appetite for home entertainment products. Among the bright spots: 

• Blu-ray Disc and EST continued their steady gains with consumer spending on Blu-ray sell-through up an impressive 58 percent and EST up nearly 13 percent compared to the same period last year. 

• For major box-office hits, sales of packaged goods often surpass 50 percent on Blu-ray in their first week of release. 

• Catalog Blu-ray sales are also on the rise, with year-to-date increases of more than 60 percent, led by the stellar sales of popular classics such as Star Wars, Citizen Kane, Scarface and The Big Lebowski, among others. 

• Among the various services and platforms for delivering filmed entertainment to consumers, Blu-ray, EST, and streaming all saw growth in third quarter 2011. These also represent some of the industry’s highest growth margin areas. 

• The number of Blu-ray homes continues to climb, soaring 52 percent in the third quarter from a year earlier (including BD set-tops, PS3s and HTiBs.) Total household penetration of all Blu-ray compatible devices now stands at more than 33.5 million U.S. homes. 

• Further, 5.5 million HDTVs were sold to U.S. consumers in the third quarter 2011. HDTV penetration to date is now at more than 69.5 million U.S. households. 

• The industry is confident the holiday season will be strong. Theatrical blockbusters coming to home entertainment in the fourth quarter include Captain America: The First Avenger, Cars 2, Cowboys & Aliens, Hangover 2, Harry Potter and the Deathly Hallows: Part 2, The Help, Kung Fu