September 23, 2022
The U.K. home entertainment market is predicted to grow to £5.5 billion ($6 billion) in consumer spending over the next three years (2025), which includes £2.4 ($2.8 billion) spent on movie sales transactions.
That’s according to a new report, released Sept. 23, from The British Association for Screen Entertainment (BASE) and DEGI: The Digital Entertainment Group International (formerly DEG Europe).
The U.K. home entertainment sector was worth £3.3 billion ($3.6 billion) in 2020, and £3.7 billion ($4 billion) in 2021.
In the new report, The Evolution of Home Entertainment Report 2020 – 2025, BASE and DEGI maintain the revenue growth reflects a rise of 114% on pre-pandemic predictions and underscores category optimism showcasing the potential of multiple entertainment formats, distribution channels and access to more than 75,000 transactional titles.
“The evolution of home entertainment is in full force … where transactional formats expand to embrace premium VOD, SVOD embraces AVOD, joined by FAST, all offering consumer choice and taking a share of growing consumer engagement,” Liz Bales, CEO of BASE and DEGI, said in a statement.
Citing additional insights from Ampere Analysis, Futuresource Consulting, Kantar, the British Screen Forum, Digital Entertainment Group and The Digital Entertainment & Retail Association, Official Charts Company, the Intellectual Property Office, and Amy Jo Smith, president/CEO of DEG: The Digital Entertainment Group, among other sources, the report contends that as consumers re-emerge from the pandemic, so too will the release of new movies and subsequent consumer spending across retail and rental channels.
“The U.S. market continues to be the starting point for much of the change that is flowing into home entertainment markets around the world, and DEG members now span the globe,” Smith wrote in the report. “As we extend our global reach, closer collaboration with DEG International to align messaging and provide communication support for members in multiple regions and territories is paramount.”
Craig Armer, strategic insight director (entertainment) at Kantar, found that 35.1% of consumers in the U.K. visited the cinema at least once in the 52-week period through June 26, 2022, compared with 46.2% in the same period in 2019, equating to a drop of 24%. This downward trend then impacted the home entertainment market through a 40% drop to 5.1 million U.K. consumers renting or buying movies, compared with nine million home entertainment consumers in 2019.
“Expect this [trend] to bounce back over the next few years as the flow of new content becomes more consistent, possibly attracting as many as two million additional shoppers back into home entertainment,” Armer wrote.
At the same time, the dearth of new releases continues to spike VOD transactions for catalog titles.
“VOD is the largest source of catalog consumers, with 3.6 million more renters vs. pre-pandemic times,” Armer wrote.
The analyst added that packaged media, notably DVD, remains a cost-effective distribution channel for consumers. Specifically, the retail price of a new movie on DVD is virtually unchanged over the past nine years. Indeed, James Bond fans buying the 2012 release of Skyfall at £9.99 ($10.90) on DVD would also be able to find the 2021 release No Time to Die at the same price.
“Maintaining a strong visible presence for disc in physical retail, and continuing the drive for digital adoption, will ensure the industry navigates challenging economic circumstances whilst recovering from the disruption of the last few years,” Armer wrote.