August 10, 2021
U.S. consumers spent an estimated $15.7 billion to watch movies, TV shows and other filmed content on home and mobile platforms in the first six months of 2021, DEG: The Digital Entertainment Group reported Aug. 10.
The trade group reported the total spend was up 5.2% from the first half of 2020, when consumer spending on home entertainment was pegged at $14.9 billion.
The big winner, as expected, was subscription streaming, which posted a 21.4% gain to an estimated $12.2 billion.
The transactional segment, which includes a la carte disc and digital purchases and rentals, was down a whopping 28.7% to an estimated $3.4 billion, from $4.8 billion in the first six months of 2020.
This reflects the pronounced lack of new product available to buy or rent in the first half of this year, when uncertainty about COVID-19 prompted the studios to hold back releases until they had more clarity. New theatrical releases, the DEG stated, have “historically [been] a key driver of home entertainment spending.” In January, virus cases were surging to record highs. Then came the vaccine and a swift drop-off in new cases, resulting in a gradual reopening of theaters. Movie houses in Los Angeles, the center of the film industry, didn’t begin to reopen until March.
Another key reason for the sharp decline in consumer transactional spending reported by the DEG is that the trade group does not track revenue generated from a premium rental or sales window that studios adopted in lieu of a theatrical release, even though this, too, is money spent on home entertainment consumption.
In a DEG presentation Universal Pictures Home Entertainment president Michael Bonner 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.”
Given the lack of theatrical new releases, spending on library titles “is notably strong,” the DEG stated. Over the past two years, digital catalog sales have grown at an annualized rate of 17%, a record high.
Popular catalog titles in the period included the eight “Fast & Furious” films and “The Office” TV series from Universal Pictures Home Entertainment, Warner’s “Game of Thrones” and Harry Potter Complete 8-Film Collection DVD and Blu-ray Disc collections, Lionsgate’s John Wick Triple Feature disc set, and Paramount Home Entertainment’s A Quiet Place and “Yellowstone” sets.
The DEG noted that the 5% increase in U.S. home entertainment spending in the first half of 2021 came amid a nearly 88% drop in box-office performance for the films released in the period, due to prolonged movie theater closures due to the pandemic.
Looking at the DEG’s defined home entertainment market that excludes PVOD revenue, subscription streaming’s share of total home entertainment revenue rose to 78% by the end of June 2021, up from a 67.6% market share a year ago.
That means that the disc market (sales and rentals) fell to 8.8% of the home entertainment picture in the first half of 2021, down from 12.4% a year ago, while transactional VOD (digital sales and rentals) was down to 13.2%, from 20% a year ago.
Disc sales on their own were down to 6% in the first half of 2021, down from 8.6% a year ago.
Among just transactional home entertainment sources, disc sales and rentals comprised 40%, up about 1.73% from a year ago, with TVOD comprising 60%.