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Subscription VOD Spending Up 430% From A Year Ago, DEG

Posted by: , 11:42 AEST, Wed August 1, 2012

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New data shows huge growth in subscription video-on-demand services like Netflix, offsetting big losses in DVD and rental income
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New data released by DEG, The Digital Entertainment Group, has shown a huge surge in the take-up of subscription video-on-demand (VOD) services such as Netflix, with consumer spending up an amazing 430% compared to a year ago. Data from the last six month show that subscription VOD revenue rose from a respectable $208 million a year go to more than $1.1 billion.

If one digs deeper into the DEG statistics that cover the first six month of 2012, not everything appears rosy. DVD spending continued to fall, dragging physical disc sales (which include Blu-ray) down by 3.6%. This is despite a 13.3% rise in spending on Blu-ray.

Rental revenue also continued to decline in all sectors bar kiosks, but even including VOD style rental, total revenue dropped 17.6%. Brick-and-mortar video stores continued their decline, down 33%, while by-mail disc rentals fell at an even higher rate (down 50%).

But the growth in digital distribution, along with growth in Blu-ray, allowed home entertainment total spending to actually rise to $8.4 billion, up 1.4 percent from a year ago.

The highest growth area remains digital distribution. While spending on transactional VOD services (such as Vudu, and Amazon's Instant Video) was only up 11.6%, contributing to about 40% of all digital distribution revenue, the real winner was subscription VOD services such as Netflix and Amazon Prime, with revenue rising 430% from $208 million to $1.1 billion. 

This means that, in only a year's time, subscription VOD has grown from being about 2.5% of total home entertainment revenue to over 13%.


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