April 28, 2009 / 1:29 AM / 10 years ago

DVD sales plunge 14 percent in first quarter: industry report

LOS ANGELES (Reuters) - DVD sales dropped 14 percent to $2.9 billion in 2008’s first quarter compared to last year, an industry group said on Monday, as the key sector of the entertainment business continued a decline that has hurt movie studios and hamstrung film financing.

Overall pre-recorded home entertainment, which includes new DVDs and used DVDs, newer Blu-ray technology and Web downloads declined 5 percent to $5.3 billion for the first quarter compared to the same period a year ago, the Digital Entertainment Group (DEG) said.

But sales of Blu-ray discs, a newer high definition technology, more than doubled to $230 million in the first quarter of this year, DEG said, and digital distribution of content was up 19 percent to $487 million for the period.

Hollywood has looked to Blu-ray and digital distribution to help make up for losses in the more mature DVD market, but those industry’s are still in their infancy while DVDs have been on retail shelves for roughly a decade.

Bob Chapek, president of Walt Disney Studios Home Entertainment, said in a statement that he is confident Blu-ray sales will continue to grow.

Movie and television studios in recent years have relied on DVD sales to turn a profit on many titles, and the ongoing decline in that sector has made it harder to finance films.

Last week, Bernstein Research analyst Michael Nathanson reported U.S. consumer spending on home entertainment fell 4 percent in 2008, in the first decline since the advent of DVD.

In February, Disney Chief Executive Robert Iger described “secular changes” to DVD sales that could portend slower growth, even as the recession fades.

Reporting by Alex Dobuzinskis: Editing by Bob Tourtellotte

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