Tuesday, January 6, 2015, 10:51 PM ET|Posted by Will Richmond
Digital purchases of movies in the U.S. boomed in 2014, to $1.55 billion, up 30% from $1.19 billion in 2013, according to new data from the Digital Entertainment Group. However, the $360 million increase was more than offset by a decline in purchases of physical movies (DVD and Blu-ray) of $844 million in 2014, to $6.93 billion, an 11% drop. In fact, as the chart below shows, physical sales have declined by over $2 billion since 2011 when they were nearly $9 billion.
2014 digital purchases were helped by "Frozen," the Disney blockbuster, and by "Hunger Games: Catching Fire," from Lionsgate, the second installment of the popular book series. Digital purchases occur across iTunes, Amazon, Google Play, pay-TV operators and other outlets and are typically available a few weeks before physical and VOD/rental.
Consumers are continuing to migrate their consumption toward digital platforms, with ownership remaining relatively strong. This is somewhat counter-intuitive as many observers thought SVOD could be the death knell for movie ownership. SVOD also continued to be a bright spot for movies, increasing 26% in 2014 to just over $4 billion.
Meanwhile VOD rentals declined by 6.7% to $1.97 billion, despite the fact that pay-TV operators are putting more emphasis on paid VOD than ever. Total U.S. home entertainment spending in 2014 also declined, by 1.8%, to $17.8 billion.
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