October 26, 2012 / 5:10 PM / 5 years ago

Hollywood home video sales rise for third straight quarter

LOS ANGELES, Oct 26 (Reuters) - U.S. consumer spending on home video purchases rose slightly in the third quarter, extending a slow recovery for Hollywood studios this year as digital sales and Blu-ray discs replace traditional DVDs.

Spending on physical discs and electronic versions of movies and TV shows was $3.9 billion from July to September, according to figures released Friday by the industry-backed Digital Entertainment Group.

That was 0.2 percent higher than a year earlier, according to the DEG, a trade group whose members include studios and electronics companies in the video business.

Though small, it was the third consecutive quarter of growth for home video spending after seven years of decline in the “ancillary” market for films and TV shows. Year-to-date sales are about 1 percent higher than a year ago.

“We are seeing some meaningful stabilization in the market,” said David Bishop, president of Sony Pictures Home Entertainment and vice president of the DEG.

Growth in the ancillary market is crucial to Hollywood studios, whose films often generate more revenues from that market than from the domestic box office.

Movies studios are trying to boost the market by promoting digital sales for viewing on computers and mobile devices.

Consumers have turned away from traditional DVDs and shifted to cheaper-priced rentals through services such as Netflix Inc and Coinstar Inc’s Redbox kiosks.

The digital push is bearing fruit, industry executives said. Sales of electronic content rose 38 percent in the quarter to $187.1 million, helped in part by the industry’s Ultraviolet initiative that stores movie purchases in the cloud for mobile viewing.

The increasing popularity of mobile devices, including Apple Inc’s iPad and Amazon.com Inc’s Kindle Fire is also driving more viewing, said Ron Sanders, president of Warner Bros. Home Video and the DEG.

“That’s really helped because consumers are embracing these new devices,” Sanders said.

Sales of high-definition Blu-ray discs climbed 13 percent from a year earlier, the DEG said.

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