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Audiences Want Their VOD: Can Netflix Save the Home Entertainment Business?

Photo of Jay A. Fernandez By Jay A. Fernandez | Indiewire July 31, 2012 at 11:38AM

A report by the Digital Entertainment Group released Sunday claims that subscription VOD services, led by Netflix, have buoyed Hollywood’s home entertainment sector to such a degree that revenue is actually up for the first time in five years, according to a Paid Content article by Daniel Frankel. But the question remains whether revenue from the digital models will ever fully replace the depressed VHS/DVD streams that sustained the industry for nearly 30 years.
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A report by the Digital Entertainment Group released Sunday claims that subscription VOD services, led by Netflix, have buoyed Hollywood’s home entertainment sector to such a degree that revenue is actually up for the first time in five years, according to a Paid Content article by Daniel Frankel. But the question remains whether revenue from the digital models will ever fully replace the depressed VHS/DVD streams that sustained the industry for nearly 30 years.

According to the data from the DEG study, U.S. home entertainment is up 1.4% through the end of June, with a ballooning $2.4 billion coming from digital businesses ($1.1 from SVOD) and electronic sell-through even as physical media continues to tank.

Here’s the money graf:

With Netflix reporting $1.04 billion in U.S. streaming revenue during the first two quarters, it’s easy to tie this metric to Los Gatos, Calif. Yes, it’s all true you — the company with the cratering stock price has turned the home entertainment business around.

Meanwhile, other data from the report sends a barrage of mixed messages: Disc rentals are down 26%, but up 23% at rental kiosks; ownership continues to shift from physical to digital, but appears to be losing out on the whole to non-ownership through subscription streaming services.

A likely driver of this is that with such increased availability of good content through digital channels — and an increased focus on long-investment, high-quality TV series by consumers (think “The Wire,” “Mad Men,” etc.) — audiences are consuming at a rate that makes ownership superfluous. Who has time to watch a movie twice when there is so much great new content to catch up on?

As IW readers, where do your tastes and preferences lie? Are you an owner or streamer? And why?

Read the whole piece at Paid Content.

This article is related to: News, Netflix, VOD