News

DEG: Streaming Now Accounts for 80% of Home Entertainment Spending

Consumer spending on home entertainment in the third quarter of 2021 rose to nearly $8 billion, a gain of almost 10% from the prior year’s July through September period, according to estimates released Nov. 8 by DEG: The Digital Entertainment Group.

Just over 80% of that total, or an estimated $6.4 billion, was spent on subscriptions to streaming services such as Netflix and Disney+.

Total spending on home entertainment for the first nine months of the year, through Sept. 30, was pegged by DEG at $23.6 billion, a year-over-year gain of more than 6%. The DEG’s report notes that this spending gain “came amid a nearly 63% drop in box office.” An estimated $18.6 billion, or 79% of total consumer home entertainment spending, came from streaming, a figure that’s up 19.5% from the first nine months of 2020.

On the transactional side, total consumer spending on disc and digital sales and rentals in the third quarter was down 13% to $1.576 billion, although for the first nine months consumer spending on physical and digital media transactions sunk more than 24% to an estimated $5 billion, compared with more than $6.6 billion in the first nine months of 2020.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Digital sales of movies, TV shows and other filmed content came in at $557.8 million for the quarter and $1.7 billion for the first nine months of the year, down 13.5% and 24.5%, respectively, from the prior year.

Sales of DVDs, Blu-ray Discs and 4K Ultra HD Blu-rays generated an estimated $430.5 million in the third quarter and $1.4 billion in the first nine months of 2021, down 11% and 21.6% from the comparable periods in 2020, respectively.

Digital rentals during the third quarter fell 15.3% to $388.7 million, and 28.5% to $1.3 billion year to date, with disc rental revenues down 11.7% to $198.7 million and 21.3% to $629 million during the same time frames.

According to DEG, “factors limiting growth in the first nine months of 2021 include few new theatrical releases, which are historically a key driver of home entertainment spending, particularly in the earlier part of the period. However, with pandemic conditions improving as the year progressed and theatrical releases restarting, spending on home purchases of theatrical new releases has begun to pick up. It is expected to continue in a positive direction as theatrical releases across the industry return to a typical pattern.”

The trade group noted that during the third quarter of 2021, physical media sales of new theatrical releases rose 38%, with digital sales up 73%, “according to one reporting source.”

It is important to note that DEG numbers do not include revenue from premium VOD releases, in which new films command a higher sales and/or rental price shortly after their theatrical bow, but before their traditional release to home entertainment channels. Earlier this year, Universal Pictures Home Entertainment president Michael Bonner in a DEG presentation estimated “there’s a billion dollars in consumer spending that is not captured” in the trade group’s numbers.

“And those numbers are not insignificant,” he said. “We’ve seen tremendous engagement from consumers in that product that’s made available in early windows.”

Leave a Reply

Your email address will not be published. Required fields are marked *

three × 3 =

This site uses Akismet to reduce spam. Learn how your comment data is processed.