DEG: Home Entertainment Spending Surges 18% in Q3 of 2020

Fueled by the coronavirus pandemic, consumers spent nearly 18% more on home entertainment in the third quarter of this year than in the comparable period of 2019, according to numbers released Nov. 11 by DEG: The Digital Entertainment Group.

DEG numbers do not include money spent on premium video-on-demand (PVOD), which would have taken the home entertainment spending total significantly higher. With theaters shuttered due to the pandemic, studios chose to release several high-profile films digitally, at a premium price.

Even without PVOD, spending rose to an estimated $7.3 billion from $6.2 billion in the third quarter of 2019, DEG says, maintaining that “when new [theatrical] releases slowed as a result of production halts and theater closures … consumers seamlessly shifted their viewing to a broad variety of content, including catalog movies and TV shows.”

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As expected, consumer spending on subscription streaming surged during the three-month period that ended Sept. 30, rising nearly 39% to an estimated $5.5 billion, or 75% of total consumer spending.

With no fresh theatrical product, spending on home entertainment purchases slipped 24.4% during the third quarter, to an estimated $1.1 billion. Packaged media was hit particularly hard due to widespread store closures due to regional bans on “non-essential” retail, with consumer spending on DVD and Blu-ray Discs down 34.3% in the quarter, to an estimated $483.3 million. Spending on digital content, or “electronic sellthrough” (EST), was off just 13.9%, to an estimated $600.8 million.

Consumer spending on transactional video-on-demand, or electronic rental, ticked up slightly to an estimated $459 million from $447.6 million in the third quarter of 2019.

DVD and Blu-ray Disc rental spending was off 34.4% as stay-at-home orders limited foot traffic to video stores and Redbox kiosks.

In the first nine months of the year, overall U.S. consumer spending across digital and physical home entertainment formats came in at an estimated $22.2 billion, a 23% spike from the $18 billion consumers spent in the same period a year earlier.

Electronic sellthrough spending was up 15.8% to an estimated $2.2 billion, while electronic rental was up nearly 24% to an estimated $1.8 billion.

Spending on subscription streaming for the first nine months of 2020 is pegged by DEG at $15.6 billion, a 38.7% gain from the first nine months of 2019.

DEG says that among the top titles purchased and rented in the third quarter of 2020 were all three seasons of the TV series “Yellowstone,” from Paramount; the DreamWorks movie Trolls World Tour, distributed by Universal; RLJ Entertainment’s The Tax Collector; MGM/Orion’s Bill & Ted Face the Music, distributed by Warner Bros.; The King of Staten Island (Universal); Force of Nature (Lionsgate); Sonic the Hedgehog (Paramount); Schitt’s Creek: Season 6 (CBS), Harry Potter and the Sorcerer’s Stone (Warner Bros.) and Harry Potter and the Chamber of Secrets (Warner Bros.).

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