Welcome to Media Play News’ fifth annual look at the top home entertainment retailers.
Here, we celebrate the retailers who are engaged in the business of distributing home entertainment product on a transactional basis, not via subscription services.
These are the top third-party operators where consumers go to buy or rent movies, TV shows and other filmed content, either digitally or physically on DVD, Blu-ray Disc or 4K Ultra HD Blu-ray.
These transactional players span several categories, from brick-and-mortar and e-commerce retailers that sell physical discs to digital retailers on both the broadband and cable side that sell and rent movies and other filmed content digitally.
Some retailers are hybrids. Amazon sells discs but also sells and rents content digitally. Redbox rents DVDs and Blu-ray Discs through a network of kiosks while also offering consumers the chance to buy or rent movies digitally through its Redbox On Demand internet service (in addition to its streaming service). And Walmart, Best Buy and Target, in addition to their dominant footprint in physical disc sales, also sell discs via their growing e-commerce websites.
Consumers seem to like this buffet of a la carte options.
“I remain an ‘and,’ not an ‘or’ consumer,” says Sam Posten of Aberdeen, Md. “For action films, I generally demand highest-quality 4K UHD physical media with True HD-based Dolby Atmos and the director-approved, highest bit depth HDR-based pixels. I supplement that with a lot of digital streams from Netflix, HBO and Disney+, plus 4K HDR digital purchases from iTunes and Vudu. Sticking to one over the other seems a recipe for pain and disappointment.”
“Consumers have engaged with and embraced many home entertainment options over the last two years,” says Jason Spivak, EVP of distribution for North America television and home entertainment at Sony Pictures Entertainment. “We’ve seen continued robust growth in [digital sellthrough] — encompassing both new releases, such as Ghostbusters: Afterlife, Venom: Let There Be Carnage and Spider-Man: No Way Home, and a sustained uplift on our catalog. We have also been very pleased with the resilience of the physical market.”
“Several factors continue to drive consumer engagement in transactional offerings,” says Universal Pictures Home Entertainment president Michael Bonner. “Whether it’s access, utility, format or any number of other reasons, the transactional business remains strong. New releases are being monetized in different ways by studios, but for titles releasing early or on an exclusive basis, we’re seeing historically high engagement levels in home entertainment.”
“Transactional home entertainment, both digital and physical, continues to provide several unique propositions for the consumer that allow it to thrive alongside theatrical, streaming and licensing,” says Paramount Home Entertainment president Bob Buchi. “Consumers around the world are attracted by the earlier-than-ever access, the insightful bonus content, the highest quality of presentation, the a-la-carte flexibility, and the totality of selection at a given retailer. While the landscape has and will continue to evolve, Paramount is committed to the home entertainment business and motivated by the consumer interest and the dedicated support and partnership of retailers worldwide.”
“Purchasing on digital or disc is akin to taking a photo of your favorite vacation destination, or buying the cap or jersey of your favorite sporting team. It’s about cherishing content you hold dear, want to recall, rewatch and display proudly,” adds Craig White, EVP of worldwide distribution for home entertainment at Paramount. “Such simple pleasures, sentiments and engagement is true for filmed entertainment as well, and will always resonate.”
While the transactional marketplace continues to remain an important home entertainment sector, consumer spending in the sector declined in 2021 as streaming accelerated, according to data from DEG: The Digital Entertainment Group. DVD and Blu-ray Disc sales were down 19.5% to an estimated $1.97 billion, from $2.45 billion in 2020. Disc rentals fell 21.2% to $822.7 million, from $1.04 billion the prior year. Digital transactional sales were off 19.2% to an estimated $2.42 billion, from nearly $3 billion in 2020, while digital transactional rentals slipped 23.8% to $1.77 billion, from $2.32 billion the year before.
Things picked up in the first quarter of 2022 as new releases accelerated and the DEG began including premium digital spending in its numbers. Digital purchases of theatrical movie titles increased 17.3%, fueled by “renewed box office activity,” the DEG reported. Total digital sales of movies, TV shows and other filmed content rose 6.7% to $643.6 million, though digital rental spending still fell nearly 11% to $501 million. Consumer spending on disc purchases in the first quarter of 2022 fell nearly 19% to an estimated $388.5 million, while disc rentals were down nearly 17% to $196.1 million.
The quick appearance of first-run movies on streaming services has taken a toll on transactional spending for some consumers.
“I find that being subscribed to streaming services has really curtailed my purchases,” says Adam Gregorich, editor at the Home Theater Forum, a website for enthusiasts. “Onward was the last animated Disney title I purchased (including Marvel) because movies are fairly quickly available on Disney+. I was about to preorder Sonic 2, but noticed it’s already on Paramount+.”
These changing windows and release patterns have impacted the transactional business in varied ways, says Pedro Gutierrez, business and marketing category lead for entertainment, consumer applications and advertising at Microsoft, which has the transactional service Microsoft Movies & TV.
“The digital transactional business has been, in a word, different,” he says. “Studios took different paths to releasing content from simultaneously releasing in theaters and on streaming to shortened theatrical windows or maintaining a traditional digital release cycle. At Microsoft, we focused on providing consumers with all the choices to acquiring their desired content, whether as a transaction or on a streaming service, and ensuring our studio partners maximize the opportunities for their titles’ success.”
Subscribe HERE to the FREE Media Play News Daily Newsletter!
Top Brick-and-Mortar Retailers
Brick-and-mortar sales and rentals of DVDs and Blu-ray Discs over the past year continued to wane as digital accelerated. A lack of new content hampered disc sales and rentals during the pandemic and continues to affect the business. On top of that, in 2021, the business experienced the same supply chain hiccups that the entire retail industry suffered.
“It’s a huge problem,” Bill Hunt, editor of The Digital Bits website, said in October of last year. “Almost every title is getting delayed, and those that aren’t are hard to find on street date. … It’s just a mess everywhere.”
Eddie Cunningham, head of Studio Distribution Services (SDS), a joint venture between Universal Pictures Home Entertainment and Warner Bros. Home Entertainment to distribute DVDs, Blu-ray Discs and 4K Ultra HDs in North America, saw the problems firsthand, but he says the delivery of discs to retail is back on track.
“I am delighted to say that the supply chain at SDS, and I believe across the wider industry, has returned to its historical very high levels of service and availability on the retail shelves,” he says. “We really have all been back to our best since the start of the year. We worked very hard during the pandemic, with all the related supply chain challenges across the world, to ensure that we came out of the turbulence as quickly as possible and stronger than ever in supply chain.”
Shelf space at the mass merchants remains an issue.
“While it is always disappointing to lose any shelf space, I am delighted to be able to say that all our retail customers remain very committed to, and engaged in, the physical category,” Cunningham says. “There has inevitably been some reduction in shelf space, but these small movements are generally in line with what you would expect in a category that is under some pressure. Our job as distributors is to work closely with each and every retail partner to ensure that every inch of their retail space is as productive as possible. We need to make it work well for both the retailer and for their shoppers.”
Taking advantage of the impact of physical merchandising was key in the past year at SDS, Cunningham says.
“Leveraging the strong film content across Warner and Universal, we’ve been able to create combined larger and more impactful retail space statements, including unique and creative line looks that drive collectability — our hugely successful Halloween ‘glow in the dark’ packaging would be a good example,” he says.
On the rental side, Redbox continues to rent discs at its thousands of kiosks while expanding into digital delivery. Facing headwinds from the slowdown of new releases during the pandemic, which resulted in packaged-media rental revenue falling 57% compared with 2020, the company in May announced it would be acquired by Chicken Soup for the Soul Entertainment. Redbox remains the final physical rental outlet standing, as the last video rental store chain, Family Video, shut its doors in 2020.
“Clearly, the rental market has been under pressure for many years, but I am delighted to say that Redbox continues to do an amazing job at placing physical rental in some 38,000 high-traffic locations around the country, satisfying millions of consumers every month,” Cunningham says. “There is a good business here for many years to come.”
Despite the growth of digital, Cunningham notes that the physical disc business is still vibrant.
“There is still a huge proportion of consumers who want to own content (rather than just rent it or only stream it) and who have not, and probably now never will, move to purchasing digitally,” he says. “Something like 30% of them remain exclusively packaged-media consumers. Then, there are more who buy physical content as well as transacting digitally.
“Our research tells us that they appreciate the quality of the physical disc, not only on the high-definition formats of 4K UHD and Blu-ray, but also even on DVD. Many are movie or TV series collectors and much prefer the physical packaging and collectability of the discs.
“There is also a huge gifting opportunity with many consumers much preferring to give a physical disc and package, rather than a digital code on its own. And, last but not least, packaged media lends itself much more to impulse purchasing while in a retail store. This is obviously much harder to achieve or replicate online. We introduce a lot of in-store theater and creative displays — recent examples would be the big corrugate displays on Dune and Sing 2. Another major attraction on discs is all the bonus materials that can often be found included.”
Indeed, consumers like the extras and superior audio and video, especially on 4K Ultra HD, that can be found on discs.
“I now purchase maybe 10 discs a year, all 4K UHD,” says the Home Theater Forum’s Gregorich. “I like additional features, documentaries, commentaries, extended versions, etc.”
“I still buy an occasional first-run or favorite catalog release on 4K when I prefer to have that superior picture and audio presentation,” adds Ron Epstein, also of the Home Theater Forum.
“4K UHD is the highest-quality viewing experience for the home theater,” notes Cunningham. “The collector community is strong and vocal about what they like and what they want, too. They are quick to share online their collections and reviews of 4K transfers. These collectors want to own the best-quality content. Across the top three new releases this year through April, 4K UHD represented 30% of total consumer spend.”
Barnes & Noble
The brick-and-mortar bookseller has more than 600 stores in all 50 states and sells a large breadth of disc titles, both in store and online, though many locations have been clearing out their in-store DVD and Blu-ray inventories. As far as movies go, however, Barnes & Noble is perhaps best known for its periodic sale of Criterion Collection titles, selling the collectors brand for half off retail price.
The consumer electronics chain has more than 1,000 stores in the United States and Canada. The chain is known for its exclusive Steelbook Blu-ray cases for catalog and new releases, mostly for 4K Ultra HD combo packs. In the quarter ended April 30, Best Buy posted entertainment revenue of $593.6 million, with same-store sales dropping 13.6%. That compares with an uptick of more than 32% on revenue of $687 million during the previous-year period when consumers spent large on home entertainment due to COVID-19 shutdowns of alternative entertainment choices. Best Buy stores usually include a DVD and Blu-ray new-release kiosk near the front, with a row or two of catalog titles in the middle of the store, though some stores have their new-release booth farther back next to the catalog displays instead.
This chain of more than 200 entertainment and pop culture merchandise retail stores was formerly owned by Trans World Entertainment. As of 2020, FYE is a unit of 2428392 Inc. The chain began in 1993 and was expanded in 2001 after buying out and rebranding mall-based Camelot, Strawberries, Record Town, Coconuts and DiscJockey stores. FYE stores primarily focus on collectibles and vinyl music, though DVD, Blu-ray and 4K Ultra HD discs are prominently featured in themed displays alongside such items as Funko movie figurines, branded movie backpacks, vinyl records and squishmallows. FYE stores also feature exclusive editions, including Blu-ray Steelbooks, of titles such as Full Metal Jacket, Gremlins, Better Off Dead, Animal House, Ferris Bueller’s Day Off, Slapshot, Howard the Duck, Pitch Black and Pretty in Pink.
Grand Rapids, Mich.
The family-owned supercenter chain, featuring groceries, electronics and other items in addition to discs, has more than 240 stores throughout the Midwest in Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin. The chain sells a plethora of merchandise, with sections for clothes, groceries, a deli, a bakery, pet supplies and pharmacy items. Discs are displayed in a section alongside electronics and music.
Oakbrook Terrace, Ill.
The company rents DVDs and Blu-ray Discs as well as sells used discs via more than 38,000 kiosks. It has nearly 40 million loyalty members. The company is transitioning to digital delivery through its Redbox On Demand transactional and AVOD offerings. In May 2022, the company announced its acquisition by Chicken Soul for the Soup Entertainment. The acquisition is expected to close in the second half of 2022. The chain last year reported it has been significantly challenged by the COVID-19 pandemic with a lack of new-release movie titles undermining consumer demand, noting it released just 57 new DVD rental titles in 2021, compared with 68 in 2020 and 140 in 2019.
The chain has more than 1,900 stores in the United States. Many of the stores have been streamlining their home entertainment displays in recent years. Some continue to utilize two display stands at the front of the electronics section — one for new releases and the other for recent releases — with catalog and deep-discount shelves behind them. The newer layout at a number of stores switches to a sleeker single but taller display stand for new and recent releases, with a shelf for catalog titles next to it. Target continues to place DVD endcaps near the cash registers at the front of its stores, though its overall footprint for discs has been reduced in general, particularly for 4K discs, and some stores don’t offer any large catalog shelves beyond a couple of deep-discount endcaps, replaced mainly with rows of books or vinyl music albums. Target’s Blu-ray exclusives often feature discs with pack-in collectible art cards or a booklet, with exclusive box art.
The chain, long a top seller of discs, has approximately 10,500 stores and clubs under 46 banners in 24 countries and e-commerce websites. Walmart stores typically display new releases on an endcap in the electronics section, next to displays for catalog titles, magazines and collectibles. Often, Walmarts will dedicate a section of the catalog shelf to a themed display, such as exclusive slipcovers for holidays such as Valentine’s Day or Christmas. For exclusives, the chain typically offers a gift set packing the Blu-ray with a collectible. Franchise titles are sometimes offered as a multi-film DVD set. Some Disney titles come with exclusive slipcovers and codes for an ebook, or an enamel pin.
Top E-Commerce Retailers
E-commerce offers a breadth of titles that brick-and-mortar chains can’t replicate, and the segment got a big boost during pandemic shutdowns.
As with the brick-and-mortar stores, e-commerce behemoth Amazon lures consumers with exclusives.
“To celebrate the release of No Time to Die on 4K, Studio Distribution Services and Amazon worked together to release a premium, limited-edition gift set that was a must-own for die-hard Bond fans,” notes SDS’s Cunningham. “The exclusive featured an official Aston Martin die cast model car with a numbered Letter of Authenticity and an endorsement from director Cary Joji Fukunaga. It also included six collectible character art cards and the 4K UHD combo pack. The entire shipment sold out immediately and the buzz that was generated by the SKU was immeasurable.”
The e-commerce pioneer is a top seller of discs online, in addition to its streaming and digital transactional offerings. Under the “Movies, Music & Games” department, the online retailer offers “Movies & TV” and “Blu-ray” categories next to “CDs & Vinyl,” “Video Games” and “Prime Video,” among others.
The consumer electronics chain sells discs online in the “Movies & TV Shows” tab, offering categories such as “New Releases,” “Pre-Orders,” “4K Ultra HD Blu-ray Discs,” “Blu-ray Discs,” “Steelbooks,” “Blu-ray 3D,” “DVDs,” “TV Shows” and “Kids’ Movies and TV Shows.”
The online retailer offers heavily discounted prices on DVDs, Blu-rays, CDs and Vinyl and offers free shipping on orders of $25 or more.
The chain offers discs for sale under the “Entertainment” tab, which also includes music. Movie categories include “Deals,” “New,” “Pre-Order,” “Only at Target,” “Disney,” “Award Winning,” “4K UHD,” “Blu-ray,” “DVD” and “Kids” movies, as well as “TV Shows.” The chain also promotes titles for events such as Father’s Day.
Under the “Departments” section and the “Movies, Music & Books” tab, the chain offers new releases, 4K Ultra HD movies, Blu-ray movies, DVD movies, “TV Shows on 4K Ultra HD,” “TV Shows on Blu-ray” and “TV Shows on DVD.”
Top Broadband Digital Retailers
Online digital sales and rentals, like e-commerce, got a boost as consumers stayed home during the pandemic. But as the new-release pipeline dwindled in the wake of COVID-19 production slowdowns, these services, too, were affected.
“Like theatrical, the flow of new titles has increased, but it is still not at the cadence that the industry was releasing prior to the pandemic,” says Microsoft’s Gutierrez. “It is great to see both the increase in title flow and the understanding by consumers of digital delivery and consumption of movies, enabling new releases such as Spider-Man: No Way Home to set new transactional records.”
He added, “Transactional serves customers who want to build their film library and/or want that easy, quick access to a film rental. For the transactional business, the waning of pandemic shutdowns has had less of impact on the business comparatively to the fewer titles being released and the growth of streaming services.”
Over at Vudu, Cameron Douglas, VP of home entertainment at Fandango, notes the advantage his transactional service has over streamers.
“We offer over 200,000-plus new-release and classic movies and TV shows, many of which are not available on subscription services,” he says. “TVOD is like the modern-day Blockbuster video store, in some ways, where fans can pick from a huge catalog of first-run new releases and all their favorite classics in one place — on-demand, whenever and wherever they want them, with no subscription fees and recurring charges.”
Vudu also offers the largest 4K movie library, he notes.
Other key factors in this segment of the business continued to be premium-priced digital sales and rentals.
“Premium Video on Demand (PVOD/PEST) will continue to evolve as studios take different approaches to this type of offering,” Gutierrez says. “The key trend that appears to be more permanent is the shortened theatrical window. ‘45’ [day window] is the new ‘90,’ meaning that theatrical releases are coming to their transactional window in half the time, with some studios being even sooner. This is a great benefit for the consumer who wants to see the content from the comfort of their homes, and for the studios that can concentrate their marketing efforts over a less-extended period.”
“As home entertainment windowing and streaming strategies continue to evolve, the studios, including Paramount Pictures, have found success with a variety of premium ownership and rental models,” says Paramount’s Buchi. “Amazon with their Prime Video Cinema and other retailers, like Apple and Vudu, have done an excellent job of touting the value to the consumer.”
“One of the few bright spots since the start of the pandemic was the gains in transactional spending that we saw as the home entertainment offering became increasingly meaningful to consumers,” says Universal’s Bonner. “In particular, there is a segment of highly engaged consumers who value early access to new movies. The premium window has served this segment very well, and with its success has become a critical component of our release strategy.”
Vudu highlights these right-out-of-theaters offerings with a “Fandango at Home” label, using the moniker of its movie-ticketing service.
“Whether you want to see a film in the premium window, right out of theaters, for a movie night at home — or relive a classic film or TV series, TVOD provides depth and breadth of choice,” Douglas notes. “Instead of jumping from one service to another to find what you’re looking for, TVOD offers everything in one place.”
While digital transactional retailers may not have shelves and signs, they still find ways to merchandise and market titles.
Vudu delivers offers on movies and TV titles, collections and bundles. Also, buying on Vudu can give consumers discounts on Fandango theatrical tickets, with exclusive theatrical-home entertainment tie-ins for movies from major studios. For instance, fans purchasing the original Top Gun on Vudu received discounts on Fandango tickets to see Top Gun: Maverick in theaters.
“On Vudu, we help consumers find what to watch by curating content,” adds Douglas. “We work with our sister site Rotten Tomatoes to curate the freshest, most-critically acclaimed movies and TV — and we personalize content to the users’ interests.”
Microsoft Movies & TV uses its gamer expertise (in concert with Microsoft’s service/console Xbox) to target customers.
“With a gamer-heavy audience on both Xbox and PC, the team creates partnerships between the studios and game publishers for our consumers to get special discounts and/or content for playing a game and purchasing a movie,” Gutierrez says. “As gaming and movie IP continue to cross over (‘Halo’ series, ‘Sonic the Hedgehog,’ etc.), we focus on unique transmedia opportunities that delight our customer and support our studio and game publishing partners. For example, we are currently running a program to highlight the WB Monsterverse in Call of Duty. Microsoft customers who purchase any of our on-sale Godzilla/Kong titles will also receive free in-game currency for Call of Duty and Microsoft Reward points redeemable for more content from the Microsoft Store. We also have custom movie pricing to give our Game Pass subscribers and Microsoft Movie & TV customers incremental exclusive discounts based on their subscription and purchase history.”
Consumers have warmed to digital transactions.
“I have rented and purchased digital movies several times over the last few years due to cheap prices and 4K availability, and I love the convenience of all digital,” says home theater enthusiast Clark Green.
“I have embraced digital purchasing,” says the HTF’s Epstein, who is running out of shelf space for discs. “It’s more convenient, and I can take and watch my library anywhere I travel.”
“While I recognize the audio-video quality on streamed titles is not as good as Blu-ray or UHD, I purchase digital titles several times a month, both new releases and catalog titles, movies and TV shows,” says the HTF’s Gregorich. “I have been actively replacing some discs (both movies and TV shows) with digital copies to free up shelf space. I have wish lists with Vudu and Apple, and when catalog titles I want go on sale for less than $5, I will purchase them. I like digital ownership as you usually get the movie earlier, they now come with a lot of the same special features the discs do, and I can watch them anytime/anywhere.”
The online retailer not only offers the Prime streaming service and e-commerce disc sales, but also allows consumers to rent or buy titles digitally.
The app, offering digital purchases and rentals of movies, is available on Apple devices, smart TVs, gaming consoles and more.
Mountain View, Calif.
The online behemoth offers digital rentals and purchases of TV shows and movies.
Microsoft Movies & TV
The service offers digital rentals and purchases of TV shows and movies on the app, on the Xbox console or a Windows device.
Beverly Hills, Calif. (parent Fandango)
Fandango’s Vudu (owned by Walmart until the middle of 2020) and FandangoNow transactional digital services were combined under the Vudu moniker in 2021. Fandango is owned by Comcast and also owns movie-rating goliath Rotten Tomatoes.
Top MVPD Retailers
Multichannel video programming distributors through their value-add, on-demand services also deliver transactional content. Oft overshadowed in the media by the flashier streaming services of many of their corporate parents, these MVPD transactional services offer subscribers a choice of many films not available for streaming.
Some of these providers — Comcast Infinity, DirecTV and Verizon Fios — are among the handful of digital retailers that support the cloud-based movie rights locker system Movies Anywhere.
The U.S. broadband communications and video service provider serves approximately 4.9 million residential and business customers across 21 states through its Optimum and Suddenlink brands, in the process of rebranding.
Philadelphia (parent Comcast)
The Xfinity service, owned by Comcast Corp., offers digital content to buy or rent. Access is promoted through Comcast’s cloud-based X1 set-top box. The service is also available via the Xfinity Flex streaming device.
El Segundo, Calif.
Formerly divisions of giant telecom AT&T, the service offers digital sales of movies and TV shows as well as rental of movies to subscribers.
The satellite service offers its subscribers titles on demand. It also owns the streaming service Sling TV.
The brand of services from cable operator Charter Communications offers on demand titles.
Parent Verizon Communications uses the brand to market internet, telephone and TV service. The television service offers purchases and rentals of titles.