Digital video sales' rise breathes new life into home entertainment

Electronic sales of movies and TV shows have languished for years, as consumers gravitated to low-cost DVD rentals and online streaming services to deliver video to their television sets, computers and portable devices.

Some industry observers speculated about a permanent shift in consumer behavior, away from purchasing. A combination of factors, including access to high-definition-quality digital video and new ways to download or stream content, has yielded double-digit gains, which the industry plans to highlight at International CES, the giant consumer electronics show in Las Vegas. Annual digital sales surpassed $1 billion for the first time in 2013, the Digital Entertainment Group is expected to report. Consumers in the United States spent nearly $1.2 billion last year to buy movies and TV shows from online sellers such as Amazon.com Inc., Apple Inc.'s iTunes or Wal-Mart's Vudu, an increase of 47% from 2012. Electronic sales of newly released films and TV shows were up 60%. Electronic sales represented a small fraction of the $18.2 billion that U.S. consumers spent on home entertainment last year. But studio executives say the growth in digital purchases, together with increased revenue from Internet streaming services such as Netflix and rising Blu-ray disc sales, could help offset slumping DVD sales.