Sales of Blu-ray movies rose 20% over 2010 to top $2bn in sales for the first time since its launch in 2006, according to The Digital Entertainment Group (DEG). Total consumer spending on home filmed entertainment for the second half of the year rose nearly 1%, to $9.7bn, fueled by a strong third quarter in which spending was up 5%, which marked the first quarterly increase since 2008.

While many industry observers had predicted a sharper fall, overall spending for the category was only down 2% for the year, generating $18bn, but the industry's sales performance clearly stabilized in 2011, the DEG said.

Blu-ray Disc and Electronic Sell-Through (EST) continued to perform remarkably well with consumer spending on Blu-ray sell-through up 20% and EST up 9% for the year to earn $554m. Additionally, consumer spending on VOD was up 7% to $1.86bn. Subscription-based streaming services like Netflix generated $993.6 million, according to DEG figures.

Increasing the value of ownership for movie lovers, Sony Pictures Home Entertainment, Universal Studios Home Entertainment and Warner Home Video launched their first Blu-ray Disc titles with UltraViolet in 2011. The DEG estimates that more than 100 UltraViolet titles will be available in 2012. Paramount Home Entertainment also has plans to launch titles in 2012.

The sale of discs fell 13% to generate nearly $9bn, primarily because of slower DVD sales. On the rental side, traditional retail outlets took the biggest hit last year, dropping 29% to earn $1.6bn. Kiosks, operated by Redbox and other vendors, showed the most growth in the category, up 31% to collect $1.7bn in fees. The DVD-by-mail biz still saw 4% growth last year, earning $2.4bn.

Blu-ray homes continues to grow rapidly. Total Blu-ray penetration in 2011 jumped 38% (including BD set-tops, PS3s and HTiBs) with total household penetration of all Blu-ray compatible devices now at nearly 40 million US homes.

DEG points to consumers' continued interest in 3D TV, with a dramatic year-over-year increase in titles and unit sales of 3D Blu-ray Discs. Available 3D Blu-ray Disc titles more than tripled in 2011 compared to 2010, growing from 20 to 65, while unit sales increased more than six times in the same period.

Story filed 12.01.12