The Digital Entertainment Group (DEG) released its first quarter 2012 home entertainment report for the United States.

For more information visit: www.degonline.org

Unedited press release follows:

First Quarter Home Entertainment Spending Edges Up
Sales of Blu-ray Disc Soar 23 Percent
Digital Distribution Continues Steady Growth

The first quarter of 2012 saw the continued stabilization of the industry underscored by promising gains in Blu-ray Disc, with steady increases in electronic sell-through (EST) and video-on-demand (VOD) spending, and modest growth in sell-through.

Overall consumer spending was up 2.5 percent compared to the first quarter last year, driven by a healthy consumer appetite for Blu-ray. Blu-ray Disc saw continued double digit growth (up 23 percent) in sales over first quarter 2011. Indeed, Blu-ray Disc now accounts for one out of four of all of the physical sell-through dollars spent by consumers compared to less than 15 percent two years ago. The progress in Blu-ray Disc sales is even more significant when viewed as growth off an ever-increasing base.

Highlights for the first quarter include:

• Blu-ray Disc and EST continued their steady gains with consumer spending on Blu-ray jumping 23 percent and EST up 17 percent compared to the same period last year.

• Physical sell-through of theatrical product was up two percent for the quarter, while catalog sales on Blu-ray Disc were up 27 percent, and TV on Blu-ray sales were up 54 percent, underscoring that Blu-ray Disc is the standard for quality home entertainment.

• With most major studios backing UltraViolet, and with the support of major retailers, consumers have embraced UltraViolet’s flexibility and value of ownership by opening nearly two million UltraViolet accounts to access and enjoy their movies and TV shows in the cloud.

• The number of Blu-ray homes continues to climb, with 2.4 million players sold in the first quarter (including BD set-tops, PS3s and HTiBs). Total household penetration of all Blu-ray compatible devices now stands at more than 40.8 million U.S. homes.

• Further, 6.5 million HDTVs were sold to U.S. consumers in the first quarter 2012. HDTV penetration to date is now at more than 77.6 million U.S. households.

* The DEG began breaking out streaming revenue in the first quarter of 2011. In the first half of 2011, streaming revenue was shown as part of the rental category. In Q3- 2011, to more accurately reflect the overall trends in digital performance, streaming was shifted from the rental category to the digital category and the first-half of 2011 was reformatted to reflect the change which allows for comparisons to previous quarters. Comparable data for streaming is not available for 2010. **DEG added an additional metric in Q4 2011 showing the change in box office value for the video category for the comparable period. This metric is included for Q1 2012.