entertainment merchants association

EMA’s 2011 D² Report: Discs & Digital – The Business of Home Entertainment Retailing is now available. This annual publication provides a current snapshot of the video and video game industries - discussing consumer spending, technology, product and retail trends, and projections for growth and change.

Some of the highlights and topics covered in the Report include:

Video Games

· The video game industry was flat in 2010 with $15.5
billion in consumer spending.

· Physical discs still the most common format - In the fourth quarter of 2010, 71% of video
games purchased by consumers were in physical formats.

· Digital game content growing
o 44% of console households have purchased downloadable game content.This is
expected to grow to 58% by 2013.

o 64% of core gamers own at least one downloadable game.

· Game consoles are quickly becoming entertainment centers.

o U.S. households owning Sony’s PlayStation 3 said it was used for playing DVDs and Blu-
ray Discs 27% of the time and 13% of the time was spent downloading or streaming
movies.

o Microsoft’s Xbox was used 40% of the time for non-game play.

Home Entertainment – DVD and Blu-ray

· Consumer spending in 2010 for DVD, Blu-ray and digital totaled $18.8 billion – a 3.3%
decline over 2009.There were significant areas of growth in spending:

o Blu-ray disc spending increased 53% over 2009

· Spending on discs still dominates in 2010

o Consumer spending on DVD and Blu-ray Discs accounted for 42% of all video spending.
This compares with 25% spent at box office, 27% on pay/premium TV and 5% on VOD and
EST.

o DVD and Blu-ray disc sales and rentals provide 51% of studio video revenue.Studio
revenue from box office is 26%, premium/pay TV is 16% and VOD/EST is 7%.

· Spending on 3D Blu-ray discs in 2010 was $28.4 million.This is expected to grow to $682.2
million by 2014.

Retail

· The Report provides an update on the industry’s leading retailers including Amazon, Best
Buy, DISH, GameStop, Hastings, Redbox, Netflix, Target and more.

· The rental business models for consumer spending in 2011 are projected to be 22% in
traditional stores, 50% through subscription and 28% at kiosks.

Digital

· In 2010 VOD increased 21%.

· VOD consumer spending in 2010 was $155 million.This is projected to reach $439 million
by 2015.

· In 2010 Electronic sell-through (EST) increased 16%

· EST consumer spending in 2010 was $231 million.Spending is projected to grow to $397
million by 2015.

To purchase a copy of this report:

• EMA members receive one print copy of the D2 Report: Discs & Digital – The Business of
Home Entertainment Retailing at no cost. Members may order additional print copies for
$19.95 each.

• Non-members can purchase copies for $75.00 each.

• Reports can be ordered in print and PDF versions.