The home entertainment market was down 5% in 2009, though still reaching $22.8 billion in US consumer spending on all pre-recorded content. Blu-ray Disc products were the bright spot of the industry with annual software sales and rental transactions hitting $1.5 billion for the first time. These and other home entertainment year-end sales figures were announced by DEG: The Digital Entertainment Group at the International Consumer Electronics Show (CES).

According to the DEG, with input from all major motion picture studios, Blu-ray Disc continued its sharp growth through the end of the year, with software sell-through up 70% and rental up 48%. In the fourth quarter alone, Blu-ray enjoyed title sales in excess of $500 million, representing 13.4% of all sell-through sales versus 8% for each of the prior three quarters. Blu-ray new release sales in the fourth quarter rose 17% while catalogue title sales doubled from a year ago. The DEG also estimates that the number of Blu-ray playback devices in US households soared to 17 million in 2009, up 76% compared to year-end 2008.

The Hollywood-based trade group reported that, in the US, consumer transactions for pre-recorded content saw an increase of 2.8% to 3.5 billion units over the prior year, indicating a continued consumer demand for home entertainment products. While consumer spending for home entertainment was down 5% for the year, this compares favorably to the general retail sector, which saw a more significant decline of 6.3% in total retail sales, according to Wells Fargo Securities.

The DEG group also noted that rental spending was up 4.2% to $6.5 billion for the year, according to Rentrak Corporation´s Home Video Essentials. Total annual spending on sell-through of Blu-ray Disc and DVD was down to $14.2 billion.

An increase in digital homes and the broader availability of day-and-date video-on-demand (VOD) stimulated the growth of digital distribution in 2009, with consumer spending on electronic sell-through (EST) and VOD up a combined 32% to $2.1 billion. Further, VOD growth accelerated 63% in the fourth quarter versus 20% in each of the previous three quarters.

Consumers are also taking advantage of the bonus Digital Copy that studios are now including in select releases, with redemptions as high as 20% on hit titles such as "X-Men Origins: Wolverine" (Twentieth Century Fox Home Entertainment), "The Dark Knight" (Warner Home Video) and "Star Trek" (Paramount Home Entertainment).

Sales of Blu-ray Disc playback devices – including set-top box and game consoles – sold through 17.3 million units since launch. Some 4.5 million devices sold in the fourth quarter alone, bringing total units sold to nearly eight million in calendar 2009, according to numbers compiled by the DEG with input from retail tracking sources. There are nearly 80 Blu-ray playback devices available, with set-top models from as low as $99

DVD is not dead, yet. An estimated 22.8 million DVD players were sold to US consumers in 2009. Since launch in spring 1997, some 277 million DVD players, including set-top and portable DVD players, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination players, have sold to consumers, bringing the number of DVD households to approximately 92 million (adjusting for households with more than one player). The DEG estimates that 67 percent of DVD owners have more than one player.

Story filed 09.01.10