May 1, 2013 / 11:00 AM / 5 years ago

REFILE-Boosted by digital, Hollywood home entertainment sales grow 5 pct

By Ronald Grover

April 30 (Reuters) - Hollywood studios saw sales of Blu-ray, online distribution and other home viewing of their movies grow by 5 percent in the first quarter in comparison to only 0.23 percent for all of last year.

Consumers spent $4.7 billion in the quarter to buy Blu-ray discs, subscriptions to Netflix-like services and other outlets, according to the industry-backed Digital Entertainment Group.

Movie studios rely on home entertainment sales for as much as 40 percent of a movie’s revenues.

“We’ve stabilized disc sales and are at an inflection point with digital sales that make us confident we can continue this path,” said Sony Pictures Home Entertainment President David Bishop, vice president of DEG’s board of directors.

Sales of Blu-ray and other packaged goods, the largest segment, grew by 2.1 percent to $2.1 billion, boosted by a 37 percent increase in Blu-ray sales of new movies such as the James Bond movie “Skyfall” and Walt Disney’s animated “Wreck-It-Ralph.”

Consumers bought 3.2 million Blu-ray playing devices in the first quarter, giving nearly 60 percent of U.S. homes the ability to play the discs on set-top players, video consoles and other devices.

Digital sales continue to be the industry’s fastest growing segment, paced by subscriptions to services like Netflix that increased by 29 percent to $709.6 million in the quarter. Movie video-on-demand sales, including those rented through cable TV operators, grew by 15.7 percent to $614.9 million.

The next quarter may slow due to lower ticket sales for movies released earlier this year, said Ron Sanders, president of Warner Home Video and DEG president.

But overall Sanders expects 2013 growth to be robust after a summer stocked with high-visibility films like “Iron Man 3” and “Star Trek Into Darkness” that are expected to reach the home entertainment market over the holidays.

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