Analyst: Rental to Surpass Sellthrough in 2013 - High-Def Digest Forums
Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 02-15-2013, 07:12 PM
bruceames's Avatar
Senior Member
Thread Starter
 
Join Date: Jan 2007
Posts: 7,479
Default Analyst: Rental to Surpass Sellthrough in 2013

Quote:
Blu-ray Disc and digital not enough to offset DVD sales declines

Home entertainment is returning to its rental roots, with purchases of physical and digital content expected to account for 49% of consumer spending this year compared with more than 51% in 2012, according to BTIG Research analyst Richard Greenfield.

Total consumer spending on home entertainment is expected to reach $17.9 billion, down 0.4% from $18 billion in 2012, according to industry and BTIG data.

The projections, if correct, would mark the first time rental revenue topped sellthrough since 2000 when sales of movies and TV DVD began a meteoric rise to the top of the studio food chain as consumers flocked to own content.

Total sellthrough, which includes DVD, Blu-ray Disc and digital, is expected to surpass $8.8 billion compared with $9.1 billion in rental spending. Sales projections are down 4.8% from 2012 when consumer spending on sellthrough topped $9.2 billion.

The decline is primarily driven by a projected 15% drop in DVD sales to $5.2 billion, offset by 6% rise in Blu-ray purchases to $2.5 billion and 40% surge in electronic sellthrough to $1.1 billion.

Indeed, sales of movies and TV shows topped 60% of consumer spending in 2009 — a percentage that dropped to 53% in 2011 as Redbox and subscription video-on-demand began to undermine the sellthrough market.

SVOD revenue is expected to surge 30% this year to $3 billion, while transactional VOD grows 13% to more than $2.2 billion. Kiosk rentals will grow revenue 10% to $2.1 billion, offset by 30% drop in by-mail (to $881 million) and 32% decline (to $827 million) in video store disc rentals.

In a Hollywood panel discussion earlier this month, Michael Lynton, CEO of Sony Corp. of America and Sony Pictures Entertainment, said consumers are parting with the notion of owning content.

“It’s more about access to content,” Lynton said. “People are breaking the emotional hold of ‘I have to have own it if I consume it.’ Once it shifts, a lot changes and it is happening pretty quickly.”

BTIG’s Greenfield says studios have three options to staunch waning sellthrough, including tweaking release windows, lower unit pricing and UltraViolet.

The analyst says movies should be released into retail channels six to eight weeks after theatrical compared with the current 14 to 15 week gap.

“With Comcast’s ownership of Universal and Warner’s Bros. recent management change, we would hope to see real progress in 2013 toward shortening windows, despite the continued tacit collusion of the movie exhibition industry,” Greenfield wrote.

He said 20th Century Fox Home Entertainment’s push to price Digital HD releases at $15 is still too high, and should be lowered to less than $10. The analyst added that while the cloud-based UltraViolet digital storage platform has registered millions of accounts, it remains lower on the to-do list.

“We believe windowing and price are far more important problems to solve than functionality,” Greenfield wrote.
http://www.homemediamagazine.com/ind...ugh-2013-29641
Reply With Quote
  #2  
Old 02-15-2013, 07:14 PM
bruceames's Avatar
Senior Member
Thread Starter
 
Join Date: Jan 2007
Posts: 7,479
Default

Here is a recap of the DEG Report 2012 sales data that the above article is basing its info on. The figures in parentheses are the 2011 figures and the arrows represent the direction of growth.

DEG Summary stats for 2012: (figures in millions)

Total home entertainment (HE): $18000.02 --> +$41.20 --> +0.2% ↑(-0.4%)


Sell-through vs. Rental:

Sell-through total: $9273.70 --> -$280.95 --> -2.9% ↑(-11.6%) --> 51.5% share ↓(53.2%) (of HE total)

DVD: $6105.78 --> -$746.02 --> -10.9% ↑(-19.4%) --> 65.8% ↓ ↓(71.7%)share (of sell-through, including EST)
Blu-ray: $2356.40 --> +$206.40 --> +9.6% ↓(+19.4%) --> 25.4% ↑(22.5%) share
EST: $811.52 --> +$208.67 --> +34.6% (18.7%) --> 8.8% share ↑(6.3%)


Rental total: $8726.52 --> +$322.06 --> +3.8% ↓(+16.5%) --> 48.5% share ↑(46.8%) (of HE total)

OD rental: $4411.88 --> -$605.01 --> -12.1% ↓(-8.1%)--> 50.6% share ↓↓(59.7%) (of total rental)

B&M rental: $1216.02 --> -$383.19 --> -24.0% ↑(-30.7%) --> 27.6% share ↓(31.9%) (of OD rental)
Disc-by-mail rental: $1258.09 --> -$483.13 --> -27.7% ↓(-23.4%) --> 28.5% ↓(34.7%) share
Kiosk: $1937.77 --> +$261.31 --> +15.6% ↓(+32.3%) --> 43.9% share ↑↑(33.4%)

Digital rental: $4314.64 --> +$927.07 --> +27.4% (+57.5%) --> 49.4% share ↑↑(40.3%) (of total rental)

VOD: $1977.21 --> +$192.78 --> +10.8% ↑(+2.1%)--> 45.8% share ↓(52.7%)(of digital rental)
SVOD: $2337.43 --> +734.29 --> +45.8% ↓(297.8%) --> 54.2% share ↑↑(47.3%)(of digital rental)




Optical vs. Digital:

Optical: $12874.06 --> -$1094.63 --> -7.8% (-11.4%) --> 71.5% share ↓(77.8%) (of HE total)
Digital: $5126.16 --> +$1135.74 --> +28.5%
(76.6%) --> 28.5% share ↑(22.2%) (of HE total)



Net Category gains/losses:

1) SVOD: +$734.29 ↓(+$1200.14)
2) Kiosk: +$261.31 ↓(+$409.46)
3) EST: +$208.67 ↑(+$94.87)
4) Blu-ray: +$206.40 ↓(+$350.00)
5) VOD: +$192.78 ↑(+$36.77)


6) B&M rental: -$383.19 ↑(-$710.11)
7) DVD: -$746.02 ↑↑(-$1654.20)
8) Disc-by-mail rental: -$483.13 ↑(+$530.92)
Reply With Quote
Reply

Related Topics
Thread Thread Starter Forum Replies Last Post
Possible New Warner Window Could Change the Sellthrough Game Lee Stewart High Definition Smackdown 74 10-19-2011 07:11 PM
Analyst: Redbox Can Up Daily Rental Fee 25% Lee Stewart High Definition Smackdown 4 09-21-2011 08:16 PM
Analyst: Netflix, Kiosks Continue to Undermine Sellthrough Lee Stewart High Definition Smackdown 63 11-12-2010 05:58 PM
HMM Article: Packaged Media Resilient: Rental, Sellthrough are Holding up in Downturn Kosty High Definition Smackdown 1 03-29-2009 05:35 AM
Panel: Electronic Sellthrough at Crossroads Grubert High Definition Smackdown 19 06-18-2008 12:37 PM


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off