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Netflix, Digital Sales Fail to Offset Decline in Home Entertainment Purchases

Posted by: , 19:28 AEST, Tue August 8, 2017

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Physical media continues to decline, while many flocking to subscription streaming and away from outright purchases
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Image/Photo Credit: Compact Discs by Petr Kratochvil

Gains in digital sell-through failed to arrest the decline in home entertainment purchases, but huge gains in subscription streaming helped total consumer spending edge up 2.6% compared to the same period from 2016, according to the latest industry report from DEG.

Total consumer spending was $9.17 billion for the first half of 2017, up from the $8.94 billion from the same period in 2016.

A massive 24% rise in subscription streaming spending, led mostly by Netflix, was the main reason for the rise in spending, as home entertainment purchases actually dropped $190 million, or 5.2%.

The drop in purchases was largely down to a $280 million (10.4%) decline in physical media sales, although DEG's figures show the decline slowing in Q2 thanks to a 2% rise in Blu-ray sales. Electronic sellthrough helped to offset losses from physical sellthrough, with sales rising 8.3% to $1.07 billion.

This data seems to indicate a shift in consumer sentiment, first away from physical to digital, and second, away from "owning" to a subscription model.

4K adoption continued strongly in the first half of 2017, with 4.8 million 4K TVs sold in the period, coupled with over 1 million UHD Blu-ray players sold. Disney is still yet to enter the UHD Blu-ray market, but is expected to do so this quarter and this will increase the number of UHD titles available on the market (currently at 166).

[via Home Media Magazine]


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