Cut! Home Entertainment Industry Softens Losses

- Finance - Jan 10, 2012

The Digital Entertainment Group, an official research conglomeration, released numbers on Tuesday approximating an $18.4 billion dollar revenue for the home entertainment industry in 2011. The data indicates a refreshing two percent decline from last year’s numbers. The report comes as good news for the industry, as home entertainment suffered enormous losses in recent years, (undergoing perpetual negative growth,) and has not seen such a slight decline in profit since 2008.

The revenue numbers represent the rental profits of everything from DVDs to cable and satellite Video On Demand. In addition, recent years have revamped the industry as internet accessible rentals created revenues in downloading and streaming movie and TV programming. These innovative internet sensations have added major profit to the industry, earning a whopping $994.6 million in revenue in 2011 alone.

Another trailblazing moneymaker was the infantile success of the industry’s kiosk business. Rental outlets such as Redbox earned $1.6 billion dollars, proving a 30 percent increase from 2010. It seems Redbox’s main competitor is Netflix, as the premiere online movie outlet earned $2.6 billion dollars in 2011, up 4.1 percent in 2011.

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So where is the major bleed in revenue coming from? Well brick-and-mortar outlets of course. Traditional video rental stores like Blockbuster saw a 29 percent decrease in profits in 2011. As convenience oriented customers continue to dismiss the idea of exerting excess effort by visiting a physical store, the industry will most likely see profit losses, until the outdated institutions close all together.

However we may just have to consider the source in properly gauging these numbers. The Digital Entertainment Group is backed by Hollywood’s major studios, people that have an acute interest in making sure people do not get their entertainment fix from the comfort of their own home. It is not too outlandish to estimate that the studios would want viewers to rush out to the movies, as the majority of studio profits come from movie house ticket sales, not from home rental prices.

Regardless of the viewing medium, the numbers indicate the masses still love being entertained. And while the losses of the industry are technically negative, the industry is still making mega-bucks profit, as $18.4 billion dollars in profit in a single fiscal year is nothing to lament.

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