Home Entertianment Spending Falls on Declining DVD Sales

U.S. consumer spending on home entertainment dropped in the second quarter as outlays on digital-media purchases failed to counter shrinking DVD sales, Digital Entertainment Group said.

Total spending on at-home entertainment fell 1.4 percent to $3.94 billion, from almost $4 billion a year earlier, the Hollywood-backed company said in a statement today. Viewers increased their spending 2 percent to $8.63 billion during the first half of 2013.

Hollywood studios are looking to digital-viewing methods such as the Internet-streaming services offered by Netflix Inc. (NFLX) and Hulu LLC to bolster falling DVD sales and rental services. Digital sales, which include video on demand, as well as Web-delivered content, rose 22 percent to $1.51 billion during the quarter.

Spending on packaged goods, such as DVDs, dropped 13 percent and rental sales excluding video on demand declined more than 10 percent. Spending on content watched via streaming and discs increased 15 percent to $1.04 billion. Consumers cut their spending on physical subscription services by 19 percent, while they spent 35 percent more for Web-only streaming.

Blu-ray disc sales grew 15 percent in the first half of 2013.

To contact the reporter on this story: Madeline McMahon in New York at mmcmahon26@bloomberg.net

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