For the second year in a row, the home video industry has grown. According to IHS Screen Digest, the market for physical and digital video – both sales and rental – grew from $18.168 billion in 2012 to $18.290 billion in 2013. Even though that is only a 0.7% increase, it is worthy of celebration.
Our industry went through quite a rough patch from 2004 until 2011, dropping from a $21.9 billion to a $17.6 billion market. And there were plenty of naysayers out there ready to write off the industry.
Well, we’re still here, and we are doing fine.
Certainly, not all is rosy in home video. The DVD sales segment, although still the largest in home video, continues to see double-digit declines. Brick and mortar rental was barely above $1 billion last year, and is sure to drop further with the demise of Blockbuster. Subscription DVD rental experienced the steepest decline, 21% to $1.2 billion, due to a changing business model.
The bigger picture, though, is that DVD sales, which are still the largest component of the home video pie, totaled $5.2 billion last year, Blu-ray spending was up to $2.2 billion, the number of Ultraviolet accounts increased to more than 15 million, kiosk rentals remain incredibly popular and sustain the rental market with $2.0 billion in revenues, EST spending grew 39% last year and exceeded $1 billion in sales for the first time, iVOD spending increased 40%, and digital video subscription spending – the largest component of the digital video market – grew 31% to $3.2 billion.
What this shows is a healthy transition of the industry from one that, for all practical purposes, provided just two options 15 years ago – renting from a brick and mortar store or buying from a brick and mortar store – to an industry that offers consumers a multitude of options to get what they want how and where they want it.
We also need to keep in mind where we stand in the entertainment ecosystem. A recent Harris Poll found that Americans prefer to watch movies at home rather than in the theaters, and by a wide margin: 57% to 21%. I congratulate our theatrical brethren for a record-breaking year last year (and look forward to those films coming to home video!), but I can’t help but note that box office totaled $10.5 billion, just 57% of the home video market.
And there is one other factoid I like to share with people: light bulbs are just a $1 billion annual business in the U.S. Think about that: every home needs dozens of them and they have to be replaced periodically, and yet it is only a $1 billion-per-year industry. Home video, which is not a necessity, dwarfs it. So let’s raise a toast to a successful 2013 and, hopefully, an even more prosperous 2014, as it’s far from time to turn out the lights on home video.
[Originally published in Home Media Magazine, February 3, 2014.]