The Digital Entertainment Group (DEG) released its first quarter 2010 Home Entertainment Report.

According to the report, Blu-ray Disc (BD) software sales continued to rise in the first quarter of 2010, up 74% compared to the same period last year. Consumer spending for the first quarter on pre-recorded entertainment, which includes DVD, Blu-ray Disc and digital distribution, was $4.8 billion, down 8% compared to the same period last year.

Blu-ray Disc Software Shipments in U.S. & Canada
(millions)

(Figures compiled by Swicker & Associates on behalf of DEG: The Digital Entertainment Group)

For more information visit: www.degonline.org

Unedited press release follows:

DEG FIRST QUARTER 2010 HOME ENTERTAINMENT REPORT

HOME ENTERTAINMENT HAS PROMISING FIRST QUARTER FUELED BY BLU-RAY SALES

Blu-ray Disc Software Sales Up 74 Percent

Blu-ray Disc Set-Top Sales Up 125 Percent

Digital Distribution Up 27 Percent

LOS ANGELES (April 15, 2010) – Blu-ray Disc software sales continued to rise in the first quarter of 2010, up 74 percent compared to the same period last year. Consumer spending for the first quarter in the home entertainment window for pre-recorded entertainment, which includes DVD, Blu-ray Disc and digital distribution, was $4.8 billion, down eight percent compared to the same period last year. These and other U.S. sales figures for the home entertainment industry were released today by DEG: The Digital Entertainment Group.

According to the DEG, with input from all major motion picture studios, Blu-ray Disc software continued to see significant growth in the first quarter with sell-through up 74 percent and rental up 36 percent, compared to the same period last year. Total rental was down 14 percent in the first quarter, largely as a result of brick and mortar store closures, according to Rentrak Corporation’s Home Video Essentials. The DEG also announced that Blu-ray Disc hardware sales experienced remarkable growth, with set-tops up an astounding 125 percent versus first quarter 2009. Additionally, digital distribution, which includes electronic sell-through (EST) and video-on-demand (VOD), grew a combined 27 percent to $617 million in the first quarter compared to the same period last year.

While the industry faced tough comparisons to the first quarter of 2009, the home entertainment category performed extremely well in March 2010 compared to March 2009, with consumer spending on home entertainment up two percent for the month, consumer spending on sell-through up four percent, consumer spending on digital up 35 percent, and Blu-ray Disc software sales up a staggering 124 percent. The DEG also noted that the Easter holiday often sees a spike in gift buying, which helped to fuel March sales.

“We are still facing a challenging environment but are very pleased to see positive indicators of stabilization in our overall business,” said Ron Sanders, President, DEG and President, Warner Home Video. “We are encouraged to see consumers continue to realize the tremendous value of Blu-ray and growing more comfortable with digital delivery.”

The DEG compiles quarterly sales data for various products within the home entertainment category, including Blu-ray Disc, DVD and HDTV. The industry association compiles its data based on input from member companies, retailers and industry association tracking sources.

Consumer spending for sell-through packaged goods exceeded $2.5 billion for the quarter, while packaged goods sales in the first quarter were off 11 percent, according to industry data. During this period last year, national retailer Circuit City was undergoing its chain-wide liquidation which included releasing unexpected quantities of DVD and Blu-ray Disc titles in the market. According to the Nielsen Company, the impact of Circuit City’s liquidation significantly affected comparisons to sales for first quarter of 2010.

BLU-RAY DISC SEES SIGNIFICANT GROWTH
While sales of Blu-ray Discs topped 74 percent, some 34 million Blu-ray Discs shipped to retail, according to figures compiled by Swicker & Associates on behalf of the DEG. This is growth of 72 percent over the same period last year. Household penetration of all Blu-ray Disc compatible devices, including set-top players, PC drives and PlayStation 3 consoles has now reached 18 million U.S. homes.

HDTV SALES EXPERIENCE MORE GROWTH
According to figures compiled by the DEG based on data from CEA, retailers and manufacturers some 75 million HDTVs have sold to consumers. With some 4.7 million HDTVs selling in the first quarter, U.S. household penetration is at approximately 50 million. Nearly 34 percent of all HDTV owners have more than one set.

DVD PLAYER SALES REACH 94 MILLION
According to figures compiled by the DEG based on data from CEA, retailers and manufacturers, more than 94 million DVD players sold to U.S. consumers in the first quarter of 2010.

Since launch in spring 1997, some 280 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 91 million (adjusting for households with more than one player). The DEG estimates that some 67 percent of DVD owners have more than one player.

DEG: The Digital Entertainment Group is a Los Angeles-based, industry-funded nonprofit corporation that advocates and promotes the many consumer benefits associated with various home entertainment products, including both physical and digital media on a variety of platforms. The DEG helps provide information and perspective about the home entertainment industry. The DEG also offers a forum for member companies to engage in ongoing discussions concerning various opportunities related to promoting established categories, evaluating and discussing new entertainment platforms and investigating supply chain efficiencies.

The DEG membership is comprised of: A&E Television Networks, AGI Polymatrix, Akamai, Anchor Bay Entertainment, Arvato Digital Services, Ascent Media/Blink Digital, Audionamix, Blockbuster, BluFocus, Capgemini, Cinram, Cryptography Research, D&M Holdings, Deloitte, Deluxe Digital, Direct Brands, DivX, Dolby Laboratories, DTS Entertainment, DV&A, HBO Home Entertainment, Image Entertainment, JVC USA, LAgraphico, LG Electronics, Lionsgate, Media Control GfK, MGM Home Entertainment, Microsoft, MOD Systems, Monster Cable, NCR, Netflix, Nielsen Entertainment, NPD Group, Panasonic, Paramount Home Entertainment, Philips Electronics, Pioneer Electronics (USA), RCDB, Redbox, Rovi, Samsung, ScreenPlay, Singulus Technologies, Sonic Solutions, Sony DADC, Sony Electronics, Sony Music Entertainment, Sony Pictures Home Entertainment, Summit Entertainment, Technicolor, Teradata, THX, Toshiba America Consumer Products, Trailer Park, Twentieth Century Fox Home Entertainment, Universal Music Group, Universal Operations Group, Universal Studios Home Entertainment, Verance, Vivendi Entertainment, Walt Disney Studios Home Entertainment, Warner Home Video and Wynalda Litho.