DEG: Streaming Again Fuels Surge in Consumer Home Entertainment Spending in 2022, But Digital Purchases Also Grow

U.S. consumer spending on home entertainment in 2022 rose 11.4% from the prior year to a record $36.6 billion, fueled once again by a surge in subscription video-on-demand (SVOD), or streaming, according to estimates released Feb. 7 by DEG: The Digital Entertainment Group.

The trade group reported consumer spending on subscription streaming climbed 17.3% to an estimated $30.3 billion, from $25.8 billion in 2021. Streaming in 2022 was nearly 83% of total consumer home entertainment spending.

Consumer spending in all other segments declined in 2022 except digital transactional sales, which grew 1.7% to $2.51 billion, from $2.47 billion in 2021. Digital sellthrough spending on theatrical content was up 11%.

DVD and Blu-ray Disc sales were down 19.8% to an estimated $1.58 billion, from $1.97 billion in 2021. The surge in theatrical new releases in the first three quarters benefited premium physical formats, with spending on 4K UHD Blu-ray titles ending the year with 20% growth. The most in-demand 4K UHD titles of 2022 included The Batman, Doctor Strange in the Multiverse of Madness, Jurassic World Dominion, Spider-Man: No Way Home and Top Gun: Maverick.

Disc rentals fell 16.7% to $502.4 million, from $602.7 million the prior year.

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Digital transactional rentals slipped 14.1% to $1.68 billion in 2022, from $1.95 billion the year before.

Digital transactional spending, both sellthrough and VOD rentals, includes premium releases, but not Disney+ Premier Access titles.

The DEG noted that ad-supported premium AVOD and FAST content reached estimated advertising revenue of $16.8 billion in 2022 according to estimates from Omdia, as more major streamers diversified their offerings to include lower cost subscription plans with ads. Omdia estimates show ad revenue grew by more than 40 percent for the full year.

In the fourth quarter, the DEG reported, total consumer spending on home entertainment rose 8.3% to $9.5 billion.

Subscription streaming spending rose to $7.9 billion in fourth quarter of 2022, with growth slowing slightly to 15.4%, though SVOD still accounted for more than 83% of consumer spending on home entertainment in the quarter.

Digital transactional sales in the fourth quarter dropped 7.1% to $666.3 million from $717.3 million in the same quarter of 2021. After strong gains in the first three quarters of the year, digital purchases of theatrical content were down 16% in the fourth quarter. This was due to smaller box office titles released, including less favorable home entertainment genres such as horror and comedy, according to the DEG. Digital purchases of TV product experienced declines of 12.8% for the full year, but only 2.2% in the fourth quarter, which was driven by strong demand for the most recent season of the megahit series “Yellowstone,” along with previous seasons and the spinoff “1883.”

Physical media sales fell 28% in the fourth quarter of 2022 to $428.1 million from $594.8 million in the same quarter of 2021.

Top titles across both physical and digital transactional formats (excluding premium) for the year included Dune, Encanto, Everything Everywhere All at Once, Ghostbusters: Afterlife, Jurassic World Dominion, Moonfall, No Time to Die, Sing 2, Spider-Man: No Way Home, Top Gun: Maverick, Uncharted and Yellowstone: Season 5.

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