DVD sales have recorded a huge 16% drop in revenue for 2010, but combined home entertainment revenue is only down 3%, an improving picture compared to 2009.
The main reason is that while DVD sales continue to decline at a worrying rate, Blu-ray, digital downloads/streaming and rentals are up significantly, allowing the overall loss to be limited to only 3%, down from the 7.6% loss experienced in 2009.
Blu-ray's success has been linked to the format now selling at a much lower price point than in 2009. With the low price of hardware and the popularity of combos (Blu-ray packs that include the DVD version of the movie), and with these combos priced only a couple of dollars more than the DVD-only version, Blu-ray's rise has not been a total surprise.
Rentals have also risen due to the poor economy, in which people are saving money by renting movies, as opposed to buying them.
And the growth of digital downloads, streaming and on-demand has also helped to dampen the effect of the DVD sales decline.
Blu-ray revenue rose 53% compared to last year, with rentals up a modest 2%. Digital movies sales rose 17%, while video-on-demand grew by 21%.
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