Home entertainment trade organization the Digital Entertainment Group reports the overall home entertainment business was down 1.8% to just under $17.8 billion for 2014 -- after two slight upticks in the last two years: 0.7% (2012); and 0.2% (2013).
MoffettNathanson Research says that while the decline was modest, more consistent declines could become more of a trend. Physical sales steepened in their descent -- now down 11% to $6.9 billion, following their 8% decline a year ago. Physical rentals of home entertainment were off 14% to $3.3 billion, following a decline of 12%.
Digital sales/rental continue to climb -- although a bit more modestly -- up 16% to $7.5 billion versus the 24% in 2013.
MoffettNathanson says the greatest exposure to further declines in the home entertainment business is with Time Warner, where it gets 10% of its overall revenues; 21st Century Fox at 8%; Viacom, 6%; and Walt Disney, 4%.
The fourth quarter -- the most important business time period due to holiday season activity -- was down 4% to $5.3 billion. With physical sales down nearly 16% to $2.3 billion and total digital 16% to $2.1 billion.