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DEG 2018 Mid-Year Report

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Old 08-06-2018, 03:48 PM   #1  
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Arrow DEG 2018 Mid-Year Report

Digital continues to drive consumers to spend more money on home entertainment, with total spending up 9% for the first half of 2018 from the first six months of 2017, DEG: The Digital Entertainment Group reported on Aug. 6.

U.S. consumers spent an estimated $11.26 billion on home entertainment between Jan. 1 and June 30, 2018, the DEG estimates.

The key drivers were transactional video-on-demand (TVOD) sales and subscription VOD (SVOD), or streaming subscriptions. Total spending on digital rose 21.7%, to an estimated $8.4 billion from $6.9 billion in the first half of 2017.

The bulk of that gain, as usual, came from subscription streaming services such as Netflix, Amazon, and Hulu. Spending on subscription streaming was up 29.8% to $6.13 billion, up from $4.72 billion in the prior year’s first half.

On the TVOD front, digital sales (electronic sellthrough, or EST) in the first six months of 2018 rose a healthy 9.7% to an estimated $1.18 billion.

TVOD rental spending was down a slight 1.4%, to $1.07 billion.

Combined DVD and Blu-ray Disc spending was down nearly 16% in the first half to $1.95 billion, the DEG reported.
Disc rental spending, meanwhile, was down by double digits in all three of its core categories: Traditional video store rental, down 18.1%; kiosk rental (mostly Redbox), down 16.7%, and mail (Neflix’s subscription disc-by-mail business), 19.3%.

In the second quarter, total home entertainment spending was up 9.45%, to an estimated $5.58 billion. Total spending on digital rose 23.4%, with subscription streaming up 30.7% and EST sales up 10.5%.

Disc sales in the second quarter were down 21.5%.

According to NPD, the top five disc sellers in the first six months of 2018 were Star Wars: The Last Jedi; Black Panther; Coco; and Thor: Ragnarok, all from Walt Disney, and Sony Pictures’Jumanji: Welcome to the Jungle.

In its mid-year news release, the DEG also reported:

More than 8 million 4K Ultra HD TVs were sold in the first half of 2018, bringing the total number of U.S. households to 38 million.

Approximately 1.7 million Ultra HD Blu-ray playback devices were sold in the first half of the year (including game consoles).

Growth of 4K Ultra HD content is expanding rapidly, with 344 4K Ultra HD titles available on disc, representing more than $100 million in consumer spending for the first half of the year. There are also 473 4K titles available digitally.

The DEG estimates that there are more than 125 million HDTV households representing all U.S. households.

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