Home-Video Spending Stalls in Fourth Quarter to Cap 2011 Decline

Home-video spending by U.S. consumers stalled in the final three months of 2011, leading to the seventh straight annual decline in spending on products such as DVDs and movie rentals.

Total spending rose 0.6 percent in the second half of the year, the industry-backed Digital Entertainment Group said today in an e-mailed statement. That included a 5 percent gain in the third quarter, suggesting a slower holiday season.

Spending for the year fell 2.1 percent to $18 billion, the DEG said. The decline was led by shrinking rentals from stores, where revenue fell 29 percent and fewer DVD sales, the group said. Blu-ray disc sales rose 20 percent to $2 billion, the DEG said. Total spending on packaged videos fell 13 percent for 2011, suggesting DVDs purchases shrank by about 20 percent.

The DEG didn’t break down the packaged goods category and didn’t supply fourth-quarter industry data. Joanna Sulakhyan, the group’s manager, didn’t immediately respond to phone calls seeking comment.

Subscription disc and kiosk rentals, such as those provided by Netflix Inc. (NFLX) and Coinstar Inc. (CSTR)’s Redbox, were bright spots, rising 4.1 percent and 31 percent last year, respectively. Electronic sell-through rose 9 percent for the year and video on demand increased 6.7 percent, the DEG said.

Subscription streaming, which Netflix also provides, generated $993.6 million in 2011 revenue, the DEG said. A year- earlier figure wasn’t available.

To contact the reporter on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net

To contact the editor responsible for this story: Rob Golum at rgolum@bloomberg.net

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