2021: What Now? Industry Leaders Offer Their Predictions for the Coming Year in Home Entertainment

After a year in which COVID-19 upended Hollywood, 2021 looms as one big question mark for home entertainment executives.

The pandemic accelerated the growth of streaming and made premium video-on-demand (PVOD) an economic and logistic necessity due to the closure of movie theaters. And despite the lack of fresh theatrical product, the transactional end of the home entertainment business flourished.

In 2020, films that would have been major theatrical releases — including Disney’s live-action Mulan, Universal/DreamWorks Animation’s Trolls World Tour and Warner Bros. Scoob! — hit PVOD first before moving on to other windows. Studios made the most of captive home audiences by seamlessly transitioning from PVOD to TVOD, and at the same time dug into their vaults and came up with creative ways to market catalog titles.

“COVID didn’t introduce new trends to entertainment, but it did accelerate what was already happening,” observes Jim Wuthrich, president of Warner Bros. Home Entertainment.

With a vaccine rollout underway, the big question is whether things will return to normal — or whether the changes have been so pronounced, so significant, that Hollywood will never return to its old ways. Whichever way the wind blows, industry executives say, the strides made by PVOD are unlikely to be reversed even once most of the country has been vaccinated and it is safe for theaters everywhere to reopen.

“COVID was clearly an accelerant to move more entertainment consumption to the home,” says Galen Smith, CEO of Redbox. “Event films will still be big theatrically, but there will be a push to accelerate consumers’ abilities to watch at home through PVOD and shorter overall windows — both digitally and on disc.”

Galen Smith

He adds, “We don’t believe the theatrical model will return exactly as it existed prior to COVID. The evolution over the last year benefited consumers and content creators through the introduction of new products — and a number of them, like PVOD, are here to stay. PVOD has been a model the studios have wanted to add for many years, and I expect to see more PVOD releases in 2021. It’s another way to provide customers choice, which is good for them as well as for the industry.”

Dametra Johnson-Marletti, corporate VP of Microsoft Digital Stores Category Management, agrees. “I think many consumers will be excited to return to the theaters when the COVID risk is nearer to zero,” she says. “That said, I also think that PVOD is here to stay, particularly for titles that are not forecasted to be box office blockbusters, and for a certain segment of viewers.”

The mantra for home entertainment executives, then, is to keep their fingers on the pulse of the industry, and on the consumer, and be prepared for more changes as well as more uncertainty.

Bob Buchi

“What we saw in 2020 was an anomaly, but it also demonstrated our ability to pivot and continue to monetize our content through the distribution strategies and platforms that are available to us and that make the most sense,” says Bob Buchi, president of worldwide home entertainment for Paramount Pictures. “All of these options — including traditional theatrical distribution — will continue to co-exist in a post-pandemic world.”

“I feel strongly that we need to stop framing things as ‘normal,’ whether that’s ‘back to normal’ or ‘a new normal,’” adds Amy Jo Smith, president and CEO of DEG: The Digital Entertainment Group. “Our business is currently in an accelerated state of evolution, as the pandemic created the perfect environment for overdue experimentation with distribution models. Many studios are working within this unique opportunity to offer consumers new ways to consume content at earlier points in its lifecycle, and consumers have embraced the change. There is no replacement for the experience of seeing a movie in a state-of-the-art theater, but we expect content owners will continue to meet entertainment lovers wherever it is that they choose to consume new content.”

Similarly, streaming is likely to enjoy continued high growth rates. “Recent research from the NPD Group shows that the average U.S. consumer now relies on seven different streaming video services, up from five in April,” says the DEG’s Smith. “This is another case of the pandemic accelerating a trend that was already underway. It’s great that consumers have so many streaming options at different price points and offering different content. It’s the belief of DEG’s D2C Alliance Steering Committee that as consumers continue to customize their entertainment experience, subscription and ad-supported services will continue robust growth, as will large, mainstream services and those that offer more-specialized content.”

The transactional end of the business is perhaps the most fluid as 2020 gives way to 2021. Against all odds, the business didn’t collapse when the theatrical business did. But that doesn’t mean there weren’t some dicey moments — nor will it be all smooth sailing ahead.

Dametra Johnson-Marletti

“The Microsoft Movies & TV transactional service thrives mostly on new blockbuster content,” Johnson-Marletti says. “With new production shuttered for much of the year, and top content releases pushed to 2021, our TVOD business certainly felt some headwinds. Our team had to become very creative and scrappy as they worked with our studio partners to find unique avenues for growth. We had a multi-part strategy that included shifting more focus to our catalog by bringing forward a lot of the fan-favorites and classics for consumers to find more easily. We also focused on building great thematic and seasonal collections.

“Given the current state of the pandemic-related shutdown, and the related outlook through the first two quarters of calendar year 2021, I think we will likely expect much of the same, with some positive light starting to emerge in the late April to early May timeframe. The pervasiveness of vaccine adoption, the openness of the world (as it pertains to theaters), and new windows and rollouts will all be key inputs to how the back half of 2021 plays out.

“I definitely think the approach [we took in 2020] represents a viable set of tactics that will continue to serve our customers, partners and business well in the new year.”

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With the continued erosion of disc sales in 2020 — combined consumer spending on Blu-ray Discs and DVDs was down about 26% from 2019, to a new low of $2.5 billion, according to Media Play News Research estimates — digital retailers will likely continue to stress the collectibility of digital movie sales, as they did with catalog product during 2020.

“It may not be widely known or understood, but in many ways digital movie collections offer a level of security, portability and confidence that discs cannot,” Johnson-Marletti says. “Your entire library can be accessed from almost any device, it travels with you seamlessly, and you never have to worry about damaged or lost discs. To the purest of collectors, the absence of tangible boxes may not fully satisfy, but, again, there are many benefits that outweigh the cardboard. Lowering the cost of entry and creating compelling promotions and offers that inspire first-time adoption could be a way to spur greater digital movie sales.”

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Despite the emergence of PVOD and continued growth in streaming, some observers expect theaters to stage a dramatic comeback once most of the country has been vaccinated.

“As [Paramount studio chief] Jim Gianopulos pointed out in November, when theaters re-opened in Japan and China, audiences returned en masse, driving huge box office returns for films that were available,” Paramount’s Buchi says. “Clearly, windows and consumer behaviors are shifting, but the theatrical experience will endure.”

Even so, Buchi says, “each film and situation is unique. For some films, like Top Gun: Maverick and A Quiet Place Part II, the theatrical model is optimal. On the other hand, we found tremendous success with PVOD for Love and Monsters and Spell. Some films make sense for subscription streaming services. It is not one-size-fits-all and every film needs to be evaluated individually.”

Ultimately, he adds, “we will continue to explore new distribution models and opportunities to bring our content to audiences wherever and however they want to enjoy it.”

Warner’s Wuthrich agrees. “Consumer empowerment is good for the industry and our goal is to meet the fans where they are — theaters, OTT, digital, physical,” he says. “While fans may have a preferred channel, they often participate in many, such as going to the theater, subscribing to HBO Max and picking up the Blu-ray. The multichannel experience could be one movie or across different movies, depending on interest.

“One thing is certain: If we are successful in creating compelling stories, fans will continue to show up.”

Fans certainly did continue to show up throughout 2020.

Amy Jo Smith

“The overriding trend we saw in 2020 was consumers’ hunger for, love of, and engagement with entertainment content,” said the DEG’s Smith.

“When new releases slowed as a result of production halts and theater closures during the COVID-19 pandemic, consumers hardly missed a beat.

“They just expanded their viewing to include many catalog movies and TV shows, as well as discovering films that were independent productions or may have had limited prior release.”

The pandemic in 2020 accelerated two trends, declining movie theater attendance and a surge in streaming, that were already apparent long before the first reports of a strange new flu originating in Wuhan, China, began circulating in January, as thousands of industry executives descended on Las Vegas for the CES.

Two months before the World Health Organization’s declaration of a global pandemic led to the closure of movie theaters around the world, the National Association of Theatre Owners (NATO) in January 2020 reported that the number of U.S. movie admissions in 2019 declined nearly 5% to 1.24 billion, from a 2002 peak of 1.57 billion.

Studios had been pushing for shorter theatrical windows for years, maintaining that most movies had pretty much run their big-screen course after 30 days, much less than the 90 days that typically elapsed between a film’s theatrical launch and its availability for home viewing. Some top studio executives were even calling for simultaneous releases, with films becoming available for home viewing — albeit at a premium price — the same day as their theatrical bow. The stumbling block: resistance from exhibitors, who balked at any attempts, or even just talk, of cutting into their exclusive window.

But when theaters went dark in mid-March, exhibitor leverage disappeared, overnight. PVOD was no longer a strategic objective, but, rather, a necessity, as studios had no other way to recoup production expenses.

Universal Pictures struck first, immediately making its entire theatrical slate available for home viewing on March 16. Three weeks later, Trolls World Tour was the first big film to premiere simultaneously on PVOD and in the handful of theaters, mostly drive-ins, that remained open.

Trolls World Tour

The results were strong enough that more tentpole releases followed, including Scoob! from Warner Bros., the comedy sequel Bill & Ted: Face the Music and Disney’s live-action remake of Mulan — which debuted on Disney+ as a “Premier Access” title for an additional charge.

At first, exhibitors balked. AMC Theatres, the country’s largest chain of movie theaters, initially vowed to boycott all future Universal Pictures releases. But in a June report, Wall Street analyst Robert Fishman of MoffetNathanson wrote that while exhibitors have until now been able to stand their ground, “this time is different in that all of the major studios … are likely to be more aggressive with windowing strategies. As long as multiple studios push forward with PVOD or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduces the leverage the exhibitors have as they would be unlikely to boycott multiple studios’ upcoming releases.”

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A month later, AMC and Universal announced a landmark distribution deal for the studio’s new-release movies, beginning in November. The agreement allowed Universal to distribute titles on PVOD three weekends (as little as 17 days) after their initial bow in AMC Theatres, in return for a revenue split. Four months later, AMC CEO Adam Aron called the arrangement a success, telling analysts on an earnings call, “On the only one of [six planned] PVOD movies that has been released as of yet, our analysis is that AMC [not only] came out ahead financially as we had modeled, but much better than some [analysts] had postulated or feared.”

In December, the “balance of power” Fishman referred to in his report shifted further with the bombshell announcement by Warner Bros. that it would simultaneously release all its movies through 2021 in theaters and on Warner’s new streaming platform, HBO Max, beginning with Wonder Woman 1984 on Christmas. The 17-film slate includes the new Dune adaptation, The Matrix 4 and The Suicide Squad.

Wonder Woman 1984

The coronavirus pandemic also accelerated the push toward streaming, although subscription video-on-demand, or SVOD, had long been on a roll, with DEG: The Digital Entertainment Group reporting annual gains in consumer spending on steaming services of 22% to 45% for the past 10 years.

Part of this was due to the launch of several new high-profile services competing with established leaders Netflix, Amazon Prime Video and Hulu. Two launched in November 2019 — Disney+ and Apple TV+. This year saw the rollout of two more high-profile services, WarnerMedia’s HBO Max and NBCUniversal’s Peacock.

Fears that the proliferation of subscription streaming services would lead to cannibalization have been unfounded. Instead, with captive audiences choosing, or ordered, to stick close to home due to the raging pandemic, it’s truly been a case of the more the merrier.

Disney+ is far and away the biggest success story, with the Walt Disney Co. in December 2020 announcing that its branded subscription service had reached 86.8 million subscribers. Meanwhile, Netflix was no slouch, quieting critics with outsized subscriber growth projected at 34 million additions through the end of this year and double-digit revenue gains.

In November 2020, Hub Entertainment Research found the average person was accessing 60% more streaming video services in 2020 than they were in 2018, while 90% of households with children living at home subscribed to more than one OTT video service.

“We’ve seen the number of providers per [survey] respondent rise to an all-time high during the pandemic,” analyst Jon Giegengack said in a note at the time. “The average respondent had 4.8 services. That was going up anyway, but the pandemic turbocharged it.”

Aside from the crash of the theatrical business, the emergence of PVOD and the near-saturation of subscription streaming, 2020 will be remembered as a year when home entertainment marketers, with no fresh theatrical product, managed to survive and even thrive.

Jim Wuthrich

A month into the pandemic, in April, Warner’s Wuthrich said home entertainment transactional spending shot up 38% since mid-March.

“Our digital sellthrough business [has] been up over 100% each week since safer at home began,” he said, speaking at the virtual DEG Expo.

The trend slowed as the country began to open back up, but in August the DEG reported that consumer spending on digital entertainment purchases and VOD rentals in April, May and June shot up 54%. Even nine months into the year most studio home entertainment divisions reported year-over-year gains in revenue despite virtually no theatrical product.

“We kept our content pipeline flowing by leveraging our vast catalog and releasing many remastered 4K UHD titles, both physically and digitally, including Beetlejuice, The Goonies, Full Metal Jacket and 300,” Wuthrich said. “The ongoing demand for classic titles in 4K for at-home viewing will continue to make our catalog business a relevant and profitable area for us.”

The DEG reported electronic sellthrough spending in 2020 was up 16% over 2019 to an estimated $3 billion, while electronic rental was up nearly 18.3% to an estimated $1.8 billion. Only disc sales were down, with DEG estimating combined consumer spending on Blu-ray Discs and DVDs slipped nearly 25.6% in 2020 to about $2.5 billion — a not uncommon decline, given the normal transition to digital, but one that observers say might have been compounded by store closures due to regional bans on “non-essential” retail.

The DEG’s Smith notes that during the second quarter, “at the height of new stay-at-home orders across the United States, consumer spending rose 57% on electronic sellthrough. This tells us that consumers are interested in building their digital collections, and that collecting favorite films provides a great value, particularly for families. Electronic sellthrough is also a model undergoing some really interesting innovation and experimentation in terms of pricing and release windows.”

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Paramount’s Buchi listed some of the changes at his studio in 2020. “We successfully launched our first PVOD releases, shifted our emphasis to catalog titles, and maximized our distribution deals with companies like Saban, Miramax and Romulus, which has greatly helped us to meet consumers’ demand for new entertainment while they also discover old favorites,” he said. “And because of the year’s unique circumstances, we exceeded our revenue projections.”

The effects of the pandemic, he added, “have magnified the shifts across all industries — from telemedicine and online education to flexible work arrangements and the entertainment industry. The transition to digital ownership has been steadily growing amid the explosion of streaming platforms, all of which has opened up new ways for consumers to enjoy content — a trend that is certain to continue.

“What we saw [in 2020] was an anomaly, but it also demonstrated our ability to pivot and continue to monetize our content through the distribution strategies and platforms that are available to us and that make the most sense. All of these options — including traditional theatrical distribution — will continue to co-exist in a post-pandemic world.”

2020 Hindsight: The Year in Pictures

What a year it’s been! Here’s a photo retrospective of 2020, with detailed captions chronicling the events of a year like no other. Click on any picture to start a slide show; if it’s moving too fast for you to read the captions, click on the “pause” button in the top right corner of the screen. You can then scroll through the pictures manually by clicking on the arrow button on the right side of the screen. When you click on the “pause” button, it is replaced with a “play” button. If, at some point, you want to resume the slide show, click on the “play” button in the top right corner.

2020 Hindsight: Our Annual Year in Review

NEWS ANALYSIS — Recapping the home entertainment business in 2020 is best left to an acronym that by now has been ingrained in all of our heads: COVID-19.

One of the most dramatic consequences of the global pandemic was the closure of movie theaters and government mandates to stay at home as much as possible, two developments that benefited home entertainment.

Streaming services reported major spikes in viewership, and the home entertainment divisions of the major Hollywood studios reported significant gains in transactional revenue despite the near-total lack of fresh theatrical product. New movies debuted digitally, at premium prices. And thanks to creative marketing and a rash of high-profile anniversary and 4K Ultra HD releases, sales of catalog movies soared, both digitally and on disc.

Jim Wuthrich

“2020 has been a year like no other as a result of the COVID pandemic, which affected the entertainment industry in profound ways,” said Jim Wuthrich, president of Warner Bros. Home Entertainment. “Anticipated changes in the home entertainment industry were accelerated this year as the pandemic spurred an increase in demand for content, placing an enhanced importance on the digital availability of our titles as we worked to satisfy consumers’ demand for at-home solutions.”

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“The overriding trend we saw in 2020 was consumers’ hunger for, love of, and engagement with entertainment content,” added Amy Jo Smith, president and CEO of DEG: The Digital Entertainment Group. “When new releases slowed as a result of production halts and theater closures during the COVID-19 pandemic, consumers hardly missed a beat, they just expanded their viewing to include many catalog movies and TV shows, as well as discovering films that were independent productions or may have had limited prior release.”

Bob Buchi, president of worldwide home entertainment for Paramount Pictures, agrees. “It has been an incredibly challenging year on many fronts and we are glad to have been able to provide a little relief to people by delivering entertainment into their homes through collaboration with our vendor community and in partnership with our physical and digital retailers,” he said.

A case can be made that COVID-19 didn’t really bring about monumental changes in the entertainment industry. Rather, the pandemic accelerated changes that were already in the works: specifically, declining movie theater attendance and a steady increase in streaming video subscriptions.

Two months before the World Health Organization’s declaration of a global pandemic led to the closure of movie theaters around the world, the National Association of Theatre Owners (NATO) in January 2020 reported that the number of U.S. movie admissions in 2019 declined nearly 5% to 1.24 billion from a 2002 peak of 1.57 billion.

Studios had been pushing for shorter theatrical windows for years, maintaining that most movies had pretty much run their big-screen course after 30 days, much less the 90 days that typically elapsed between a film’s theatrical launch and its availability for home viewing. Some top studio executives were even calling for simultaneous releases, with films becoming available for home viewing — albeit at a premium price — the same day as their theatrical bow. The stumbling block: resistance from exhibitors, who balked at any attempts, or even just talk, of cutting into their exclusive window.

But when theaters went dark in mid-March, exhibitor leverage disappeared, overnight. PVOD was no longer a strategic objective, but, rather, a necessity, as studios had no other way to recoup production expenses.

Universal Pictures struck first, immediately making its entire theatrical slate available for home viewing on March 16. Three weeks later, Trolls World Tour was the first big film to premiere simultaneously on PVOD and in the handful of theaters, mostly drive-ins, that remained open, and the results were strong enough that more tentpole releases followed, including Scoob! from Warner Bros., the comedy sequel Bill & Ted: Face the Music and Disney’s live-action remake of Mulan — which debuted on Disney+ as a “Premier Access” title for an additional charge.

Trolls World Tour

At first, exhibitors balked. AMC Theatres, the country’s largest chain of movie theaters, initially vowed to boycott all future Universal Pictures releases. But in a June report, Wall Street analyst Robert Fishman of MoffetNathanson wrote that while exhibitors have until now been able to stand their ground, “this time is different in that all of the major studios … are likely to be more aggressive with windowing strategies. As long as multiple studios push forward with PVOD or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduces the leverage the exhibitors have as they would be unlikely to boycott multiple studios’ upcoming releases.”

A month later, AMC and Universal announced a landmark distribution deal for the studio’s new-release movies, beginning in November. The agreement allowed Universal to distribute titles on PVOD three weekends (as little as 17 days) after their initial bow in AMC Theatres, in return for a split. Four months later, AMC CEO Adam Aron called the arrangement a success, telling analysts on an earnings call, “On the only one of [six planned] PVOD movies that has been released as of yet, our analysis is that AMC [not only] came out ahead financially as we had modeled, but much better than some [analysts] had postulated or feared.”

In December, the “balance of power” Fishman referred to in his report shifted further with the bombshell announcement by Warner Bros. that it would simultaneously release all its movies through 2021 in theaters and on Warner’s new streaming platform, HBO Max, beginning with Wonder Woman 1984 on Christmas. The 17-film 2021 slate includes the new Dune adaptation, The Matrix 4 and The Suicide Squad.

Gal Gadot in Wonder Woman 1984 (photo by Clay Enos / Warner Bros. Pictures/DC Comics)

The coronavirus pandemic also accelerated the push toward streaming, although subscription video-on-demand, or SVOD, had long been on a roll, with DEG: The Digital Entertainment Group reporting annual gains in consumer spending on steaming services of 22% to 45% for the last 10 years.

Part of this was due to the launch of several new high-profile services competing with established leaders Netflix, Amazon Prime Video and Hulu. Two launched in November 2019, Disney+ and Apple TV+. This year saw the rollout of two more high-profile services, WarnerMedia’s HBO Max and NBCUniversal’s Peacock.

Fears that the proliferation of subscription streaming services would lead to cannibalization have been unfounded. Instead, with captive audiences choosing, or ordered, to stick close to home due to the raging pandemic, it’s truly been a case of the more, the merrier.

Amy Jo Smith

“Recent research from the NPD Group shows that the average U.S. consumer now relies on seven different streaming video services, up from five in April,” said the DEG’s Amy Jo Smith. “This is another case of the pandemic accelerating a trend that was already underway.”

Disney+ is far and away the biggest success story, with the Walt Disney Co. on its Nov. 12 fiscal call reporting that the service had reached 73.7 million global subs, well ahead of company projections. Less than a month later, on Dec. 2, Disney announced that its branded subscription service had reached 86.8 million subs. Meanwhile, Netflix was no slouch, quieting critics with outsized subscriber growth projected at 34 million additions through the end of this year and double-digit revenue gains.

In November, Hub Entertainment Research found the average person is accessing 60% more streaming video services in 2020 than they did in 2018, while 90% of households with children living at home subscribe to more than one OTT video service.

“We’ve seen the number of providers per [survey] respondent rise to an all-time high during the pandemic,” analyst Jon Giegengack said in a note at the time. “The average respondent had 4.8 services. That was going up anyway, but the pandemic turbocharged it.”

Aside from the crash of the theatrical business, the emergence of PVOD and the near-saturation of subscription streaming, 2020 will be remembered as a year when home entertainment marketers, with no fresh theatrical product, managed to survive and even thrive on their own laurels.

A month into the pandemic, in April, Warner Bros.’s Jim Wuthrich said home entertainment transactional spending shot up 38% since mid-March.

“Our digital sellthrough business as [has] been up over 100% each week since safer at home began,” he said, speaking at the virtual DEG Expo.

The trend slowed as the country began to open back up, but in August the DEG reported that consumer spending on digital entertainment purchases and VOD rentals in April, May and June shot up 54%. Even nine months into the year most studio home entertainment divisions reported year-over-year gains in revenue despite virtually no theatrical product.

“We kept our content pipeline flowing by leveraging our vast catalog and releasing many remastered 4K UHD titles, both physically and digitally, including Beetlejuice, The Goonies, Full Metal Jacket and 300,” Wuthrich said. “The ongoing demand for classic titles in 4K for at-home viewing will continue to make our catalog business a relevant and profitable area for us.”

The DEG reported that for the first nine months of 2020, 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. Only disc sales were down, with DEG estimating combined consumer spending on Blu-ray Discs and DVDs slipped nearly 23% in the first nine months of the year to about $1.8 billion — a not uncommon decline, given the normal transition to digital, but one that observers say might have been compounded by store closures due to regional bans on “non-essential” retail.

The DEG’s Smith notes that during the second quarter, “at the height of new stay-at-home orders across the United States, consumer spending rose 57% on electronic sellthrough. This tells us that consumers are interested in building their digital collections, and that collecting favorite films provides a great value, particularly for families. Electronic sellthrough is also a model undergoing some really interesting innovation and experimentation in terms of pricing and release windows.”

Dametra Johnson-Marletti

Dametra Johnson-Marletti, corporate VP of the Microsoft digital stores category, said Microsoft Movies & TV “thrives most on new blockbuster content, in the traditional post-theatrical, home entertainment window. With new production shuttered for much of the year, and top content either being released to SVOD or pushed to 2021, our TVOD service has faced some headwinds. Our team had to become very creative and scrappy as they worked with our studio partners to continue to find unique avenues for growth. We had a multi-part strategy that included shifting more focus to our catalog by bringing forward a lot of the fan favorites and classics for consumers to find more easily. We also focused on building great thematic and seasonal collections with our studio partners. Finally, we have the fortune of also managing a thriving gaming business, so the ability to build great movie/game bundles has served us well.”

Looking back, Paramount’s Bob Buchi said it’s been a year of major changes. “We successfully launched our first PVOD releases, shifted our emphasis to catalog titles, and maximized our distribution deals with companies like Saban, Miramax and Romulus, which has greatly helped us to meet consumers’ demand for new entertainment while they also discover old favorites,” he said. “And because of the year’s unique circumstances, we exceeded our revenue projections.”

Bob Buchi

The effects  of the pandemic, he added, “have magnified the shifts across all industries — from telemedicine and online education to flexible work arrangements and the entertainment industry. The transition to digital ownership has been steadily growing amidst the explosion of streaming platforms, all of which has opened up new ways for consumers to enjoy content — a trend that is certain to continue.

“What we saw this year was an anomaly, but it also demonstrated our ability to pivot and continue to monetize our content through the distribution strategies and platforms that are available to us and that make the most sense. All of these options — including traditional theatrical distribution — will continue to co-exist in a post-pandemic world.”

Oscar Winner ‘Parasite,’ Netflix’s ‘The Queen’s Gambit’ Top-Streamed Movie, Series in 2020

Netflix’s ongoing chess-focused chart-topper “The Queen’s Gambit” and South Korea’s Oscar-winning drama Parasite ranked among the most-streamed episodic program and feature-length movie in 2020, according to new data from JustWatch. The analytics company is an international streaming guide that helps more than 20 million users per month across 46 countries find content on Netflix, Amazon Prime Video, Disney+, Hulu, HBO Max and Peacock, among other streaming platforms.

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A not unexpected movie in the Top 10 was Contagion, director Steven Soderbergh’s 2011 take on a global pandemic that ranked No. 4. The older movie became popular because of the coronavirus and was one of the most popular movies on JustWatch during March and April across several countries.

 

Top 10 of 2020: The Biggest Home Entertainment News Stories

With the coronavirus pandemic raging, the big Hollywood movie studios made unprecedented changes in their film-release strategies in 2020, rushing top-tier titles into the home and boosting new and existing streaming services.

It truly was a year like no other.

Here are the top 10 home entertainment news stories of 2020 as chosen by the Media Play News editorial staff.

1. Blockbusters Enter the Stream: With movies theaters shuttered during the pandemic, Walt Disney Studios and Warner Bros. took the unprecedented move to send top tier theatrical releases to their sister streaming services.

First, Walt Disney Studios offered the live-action blockbuster Mulan exclusively to Disney+ subscribers over the Labor Day weekend as a $29.99 add-on to unlock access to the movie months before its regular availability — marking Disney’s first-ever Premier Access (PVOD) release and a sea change in studio window strategy. The studio defended the decision — which was followed by sending Pixar Animation’s Soul to the Disney+ streaming service, this time at no additional cost, on Christmas — as a reality of the times. “We thought it was a really nice gesture to our subscribers during the holiday period to provide [Soul] as part of the service,” said Disney CEO Bob Chapek. “I think what we’ve learned with Mulan is that there’s going to be a role for [PVOD] strategically with our portfolio of offerings.”

After debuting such top-tier titles as Roald Dahl’s The Witches on its new streaming service HBO Max, WarnerMedia in December shocked the industry by announcing that the streaming service would offer subscribers free access to all Warner Bros. theatrical releases through 2021 concurrently with their box office debut.  The new strategy rankled exhibitors and creators, while offering moviegoers an alternative to the cineplex during the pandemic. The studio bowed Wonder Woman 1984 on HBO Max and in theaters Christmas day. Notably, WW84 posted the largest opening weekend domestic box office during the pandemic with $16.7 million — driven in part by 10,000 watch parties, or small groups renting out theaters for private screenings.

2. HBO Max Debuts: WarnerMedia in May launched its much-anticipated HBO Max subscription streaming service at $14.99 per month — the most-expensive SVOD platform on the market — with several glaring problems. The platform, which promised an ad-supported edition in 2021, bowed without consumer access via the Roku or Amazon Fire TV platforms (reportedly representing 70% of Internet access), which contributed to stalling the Max sub growth out of the gate. The fact that existing services HBO Go and HBO Now were also still available didn’t help matters, confusing consumers about what they were actually getting with an HBO Max subscription. (Both were mercifully laid to rest two months after HBO Max’s launch.) WarnerMedia eventually inked distribution deals with Roku and Amazon, helping it generate 38.6 million combined HBO/HBO Max subscribers through Sept. 30.

3. Peacock Launches: NBCUniversal April 15 launched its own streaming video platform, Peacock, the media giant’s first over-the-top video platform and an SVOD service with an ad-supported option. The company initially made the premium service available at no cost to Comcast’s X1 and Flex (Internet-only) customers before rolling it out nationally in July. It quickly generated 20 million subscribers. To boost the offering, NBCUniversal wrestled away exclusive streaming rights to the popular comedy series “The Office” from Netflix. The series, to begin streaming in a tiered plan on Peacock Jan. 1, 2021, had been a longtime draw for Netflix.

4. TVOD Has Its Moment: After it and other studios rushed titles to early digital release during the pandemic, Universal Pictures made the bold move to drop Trolls World Tour from its theatrical slate to distribute the animated sequel directly to consumers in April via premium VOD. The strategy generated $100 million in revenue in 28 days and helped revive the PVOD business model — and the transactional VOD business at large — as other studios soon joined suit by rushing titles to PVOD. Soon, titles that might have topped the box office were heading up the charts of such transactional services as Redbox On Demand, FandangoNow and Vudu.  The latter two TVOD services in April became sister services when NBCUniversal’s Fandango acquired the 10-year-old Vudu from Walmart.

“All the press is about SVOD and AVOD services, ad-supported or subscription, but transactional sort of quietly had a moment in 2020,” said Fandango VP of home entertainment Cameron Douglas during a November panel.

5. If You Can’t Beat ‘Em … : In a peace offering to theater chains, Universal Pictures inked pacts with AMC Theatres and Cinemark affording the studio early PVOD access for select theatrical releases in exchange for splitting the home entertainment revenue with exhibitors. Universal and subsidiary Focus Features picked up the right to offer consumers PVOD access to movies with less than $50 million in domestic opening weekend ticket sales. Under the pact, movies with a higher box office could be released on PVOD 31 days after their theatrical bow. As a result, Universal maintained a steady year-end theatrical slate, spearheaded by The Croods: A New Age, Freaky and News of the World, among other titles.

6. Hail to New Chiefs: In February, former Disney home entertainment head Bob Chapek was named CEO of The Walt Disney Co., with previous boss Bob Iger assuming executive chairman duties. Chapek, who most recently headed Disney’s Parks & Recreation unit, said he was well-suited directing Disney’s renewed focus on direct-to-consumer business.

In another big studio shift, ex-Hulu boss Jason Kilar became CEO of WarnerMedia in the spring and proceeded to announce layoffs — among them longtime executive Ron Sanders — and other shifts to refocus the studio on streaming.

Meanwhile, Netflix in July announced that 20-year veteran and chief creative officer Ted Sarandos would share co-CEO duties with co-founder/co-CEO Reed Hastings. The move appeared to signal a reduction in executive duties and possible retirement for Hastings, who quickly downplayed the shared corporate duties as a strategic maneuver. “Let me be really clear: I’m in for a [another] decade,” Hastings said.

7. Movie Theaters Face Existential Crisis: Movie theaters worldwide shuttered in mid-March due to the expanding coronavirus pandemic. The situation caused havoc for exhibitors, with the world’s largest, AMC Theatres, struggling to remain solvent and later opening some theaters with limited seating and strict safety protocols. Indeed, No. 2 exhibitor Regal Cinemas threw in the towel in the fall, remaining closed indefinitely. Meanwhile, studios shifted blockbuster movies online, a further blow to the exhibition business.

8. AVOD Marches on: Ad-supported VOD upped its growth trajectory with Pluto TV (owned by Viacom) and Tubi (acquired in March by Fox Corp.) expanding distribution worldwide — the latter with first-run Fox Entertainment programming such as “The Masked Singer,” among other programs. Redbox increased its digital presence, launching an ad-supported VOD platform called Redbox Free On Demand.

9. Catalog in the Spotlight: Catalog titles topped the charts on disc and digital as the new-release pipeline slowed due to the coronavirus. Studios polished catalog titles for 4K Ultra HD release, such as Paramount’s Coming to America and Beverly Hills Cop, Sony’s six-film “Resident Evil” collection, and Warner’s “The Lord of the Rings” and “The Hobbit” trilogies. With the pandemic raging, resonating and topical titles such as Sony’s Groundhog Day and Warner’s Contagion caught on with consumers. “It’s uncanny how it kind of mimics what’s going on in the real world today,” Jim Wuthrich, president of Warner Bros. Home Entertainment and Games, said of Contagion.

10. Streaming Short Timer: It wasn’t all good news for digital delivery. Quibi, the $1.7 billion mobile device-centric, short form-content video streaming service, announced just six months after starting operations that it was shuttering. Launched by DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman, in the end Quibi reportedly had fewer than 1 million subscribers willing to pay $4.99 monthly for ad-supported content no longer than 10 minutes.

Nielsen: NFL, ‘Yellowstone,’ ‘This Is Us’ Top TV Programming in 2020

Traditional linear TV may be hemorrhaging viewers and subscribers to over-the-top video, but in 2020 — especially during a pandemic — consumers continued to spend the lion’s share of their TV time with live and time-shifted programming, according to new data from Nielsen. The ratings pioneer said second-quarter 2020 live and time-shifted TV consumption among people 18 and older increased by an average of 4 minutes per day (to 4 hours, 8 minutes) from the prior year. That dwarfs the 1 hour and 14 minutes spent on TV-connected devices each day.

In the second quarter, consumers 18 and older spent just shy of 6 hours each day with video, an increase of 35 minutes from the prior-year period without the pandemic. The programming they were watching the most on the living room TV included NFL football (i.e. the Super Bowl and “Sunday Night Football”), NBC’s “This Is Us,” and Paramount Television’s “Yellowstone,” starring Kevin Costner.

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Top TV Programs of 2020 – Single Telecast

 

Top TV Programs of 2020 – Regularly Scheduled

Rank

Program

Originator

Persons 2+ Rating

Avg. No. of Viewers (millions)

1 “Sunday Night Football” NBC 5.3 16.28
2 “NCIS” CBS 5 15.4
3 “FBI” CBS 4.2 12.8
4 “NFL Thursday Night Football” FOX 4.2 12.8
5 “Blue Bloods” CBS 4 12.1
6 “Chicago Fire” NBC 3.9 11.9
7 “Chicago PD” NBC 3.7 11.5
8 “Young Sheldon” CBS 3.7 11.4
9 “Chicago Med” NBC 3.7 11.3
10 “This Is Us” NBC 3.7 11.2

 

Top Time-Shifted Programs of 2020 – Ranked By Percent Change in  Viewers

Rank

Program

Originator

% Increase in Viewers from Time-shifted Viewing

1 “Yellowstone” Paramount 214.8%
2 “Emergence” ABC 191.7%
3 “Stumptown” ABC 170.7%
4 “Manifest” NBC 157.6%
5 “The Resident” Fox 152.6%
6 “New Amsterdam” NBC 152.3%
7 “The Walking Dead” AMC 148.4%
8 “Will & Grace” NBC 144.0%
9 “Million Little Things” ABC 143.9%
10 “Good Girls” NBC 142.7%

 

Top Time-Shifted Programs of 2020

Rank

Program

Originator

Absolute Difference in Viewership (millions)

1 “This Is Us” NBC 6.5
2 “NCIS” CBS 6.2
3 “The Good Doctor”  ABC 6.1
4 “911” Fox 5.8
5 “New Amsterdam” NBC 5.7
6 “Blue Bloods” CBS 5.7
7 “Chicago PD” NBC 5.5
8 “Bull” CBS 5.4
9 “Chicago Fire” NBC 5.3
10 “FBI” CBS 5.2

 

Top 10 of 2020: The Best-Selling Disc Releases

Consumers stuck at home due to coronavirus pandemic quarantines gave home entertainment a boost as a valuable tool to pass the time. While digital delivery was the main beneficiary, physical media got a brief boost as well as a result of impulse buys and deep discount bins providing quick and easy entertainment for bored shoppers.

However, as studios began delaying their blockbuster releases and new-release options began to dwindle over the summer, the list of the year’s top-selling movies on disc became dominated by movies from 2019 released in the first few months of 2020.

For those titles that did get a release as 2020 rolled on, the general move toward digital delivery made it less likely physical media sales of those titles could match the tallies of the year’s early successes. The pandemic further limited options for shoppers wanting physical media by restricting store access and hampering production and distribution channels. The number of replication facilities already being down to a minimum due to the years-long decline of the disc market meant initial runs of discs couldn’t be mass-produced in the same numbers they had before.

Seven of the year’s top 10 titles have been on the list since April. Eight have been on the list since May. And the top four titles have been the same since March, and in the same order since April.

Here are the top selling movies in terms of combined DVD and Blu-ray Disc unit sales as reported by NPD Group’s VideoScan tracking service. (Updated Jan. 12, 2021)

1. Frozen II (Disney) — The 2013 original Frozen had been the highest-grossing non-photorealistic animated film of all time until the sequel topped it with $1.45 billion worldwide as 2019 came to a close. And with the first film among the most successful DVD and Blu-ray sellers of the past decade, the sales success of Frozen II came as no surprise, and it has pretty much been the year’s top seller since it hit shelves Feb. 25. It spent three weeks at No. 1 from February into March, making it the top seller for both months. And it had enough to secure the year’s top spot before it became available on streaming service Disney+ March 15, the studio offering it to subscribers months ahead of schedule as a result of the pandemic.

2. Star Wars: The Rise of Skywalker (Disney/Lucasfilm) — The ninth and supposedly final episode of the “Skywalker” saga earned $515 million at the domestic box office, the lowest of Disney’s three sequels George Lucas’ classic “Star Wars” films. The March 31 disc release of Rise of Skywalker arrived just as pandemic lockdowns were taking hold. That and tepid fan response to the sequel trilogy in general likely prevented consumers from buying it in the types of droves the original and prequel films received upon their home video releases. As with Frozen II, most of its top 10 sales strength came from its initial release, as it hasn’t been among the top titles shoppers were picking up later in the year. It still managed to top weekly sales for three weeks in April, and was the top seller overall for that month.

3. Joker (Warner) — The controversial comic book adaptation based on the famed Batman villain kicked off the year as the top seller for the month of January after earning $335 million from U.S. theaters and more than $1 billion worldwide. On the weekly chart, however, it was No. 1 only for the week after its Jan. 7 disc debut, and again 10 months later when it led Thanksgiving week disc sales.

4. Jumanji: The Next Level (Sony Pictures) — The third “Jumanji” movie didn’t quite match the levels of its 2017 predecessor, but at $320 million domestically was still a massive hit, and has been a consistent staple of the home entertainment top 20 since its March 17 disc release.

5. 1917 (Universal) — Director Sam Mendes’ artfully crafted and very personal tale of a pair of couriers trying to prevent a hopeless battle during World War I picked up a number of Oscars prior to its March 24 disc debut, and has been one of the more popular discs as the pandemic continued, particularly resonating during the weeks of Memorial Day and Veterans Day.

6. Trolls World Tour (Universal/DreamWorks) — DreamWorks Animation’s sequel to 2016’s Trolls was the first big hit of the pandemic era, as it mostly eschewed theaters in favor of a premium VOD strategy that reportedly earned it more than $100 million. After it arrived on DVD and Blu-ray July 7, it was the top seller for the month of July, and has spent a combined four weeks at No. 1 — two weeks in mid-July and two at the end of August, when it danced into the yearly top 10. It is thus far the only disc release of a post-pandemic theatrical or VOD title to climb into the top 10.

7. Sonic the Hedgehog (Paramount) — Released on disc May 19 after a better-than-expected $146 million domestic box office haul, Sonic would seem to have been the right disc at the right time as the highest-profile theatrical-to-disc amid a pandemic drought. It spent six consecutive weeks as the weekly No. 1 seller, the most since the original Frozen spent eight weeks at No. 1 in 2014. That made Sonic the top seller in June, but wasn’t enough to give it a spot in the top 10 sellers of the year just yet, a sign of how much the pandemic tilted sellthrough to the digital side of things. In fact, it wouldn’t be until November until it took its place among the year’s top 10 disc sellers, after getting an end-of-year boost when Paramount re-released it as a limited-edition Blu-ray with pack-in character poster cards.

8. Midway (Lionsgate, 2019) — As with 1917, director Roland Emmerich’s film about U.S. Naval campaigns in World War II from Pearl Harbor to mid-1942 likely benefited from the audience’s appreciation of the military as the pandemic raged on. The film, released on disc Feb. 18, hadn’t been much of a box office performer at the end of 2020, earning just $56.8 million domestically and $126.7 million worldwide against a reported $100 million budget.

9. Maleficent: Mistress of Evil (Disney) — The sequel to 2014’s Maleficent, continuing the story of the Sleeping Beauty villain as played by Angelina Jolie, earned $113.9 million domestically in its late-2019 theatrical run. It has been sliding down the top 10 disc sellers list since its Jan. 14 DVD and Blu-ray debut, ending January as the No. 2 title behind Joker. But it hasn’t gotten the same holiday sales season bump as Joker and some of the other titles on the list that have maintained their spots or moved up.

10. Bad Boys for Life (Sony Pictures) — The third “Bad Boys” film, coming 17 years after the second, was a big box office hit, earning $206 million domestically after bowing in theaters in January, which thanks to the pandemic held up as the top domestic grosser of the year. So it’s hardly a surprise that it would be a top seller on disc as well, arriving on DVD and Blu-ray during the early stages of the pandemic April 21.

Top 10 of 2020: The Biggest Theatrical Releases

Media Play News this week will publish a daily “top 10” to carry us through what is traditionally the slowest week of the year for home entertainment news stories. We begin with the top 10 theatrical releases of 2020, courtesy of Box Office Mojo.

Not surprisingly, the top 10 movies of 2020, ranked by domestic box office earnings, most were released prior to the March 11 declaration by the World Health Organization (WHO) of a global coronavirus pandemic.

We are only including movies that opened this year, not carryovers from 2019.

No. 1: Bad Boys for Life, $206,305,244: The third “Bad Boys” film, from Sony Pictures, opened in theaters on Jan. 17 and was released digitally 74 days later, on March 31, due to the mid-March closure of theaters. At the time, its early digital release set a record for the shortest theatrical-to-home window. The movie — starring Will Smith and Martin Lawrence — debuted April 21 on 4K Ultra HD, Blu-ray and DVD. It is a sequel to 1995’s Bad Boys and 2003’s Bad Boys II.

No. 2: Sonic the Hedgehog, $148,974,665: Based on the popular video game franchise, this Paramount Pictures release debuted in theaters on Feb. 14 and, like Bad Boys for Life, was given an early digital release, becoming available for digital purchase on March 31. The film was subsequently released on 4K Ultra HD, Blu-ray Disc, and DVD, and for rental on demand, on May 19. The film wound up topping the weekly disc sales charts for six consecutive weeks and the “Watched at Home” chart for four weeks.

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No. 3: Birds of Prey and the Fantabulous Emancipation of One Harley Quinn, $84,158,461: This DC Comics superhero film, a sequel to 2016’s Suicide Squad, was released theatrically by Warner Bros. on Feb. 7 and made available for digital purchase, at a premium price, on March 24.  Two weeks later the film could be rented, at a regular price, through digital retailers. It wasn’t until May 12 that Birds of Prey was issued on Blu-ray Disc, DVD and 4K Ultra HD, but the film still managed to find its way to the top of both the disc rental sales and rental charts.

No. 4: Dolittle, $77,047,065: This Universal Pictures comedy made its big-screen debut Jan. 17 and already had home release dates locked in when the pandemic was declared. The film, a reboot of the original 1967 Doctor  Dolittle, was released through digital retailers on March 24 and arrived on 4K Ultra HD, Blu-ray Disc and DVD on April 7. Robert Downey Jr. plays Dr. Dolittle, a man who can talk to animals. The cast also includes the voice talents of Emma Thompson, Rami Malek, Selena Gomez, John Cena and Tom Holland, among others.

No. 5: The Invisible Man, $70,410,000: This Universal Pictures release has just opened theatrically Feb. 28 when the WHO declared a global COVID-19 pandemic two weeks later. Movie theaters closed March 16 and Universal that same day announced it would immediately release its current theatrical slate into home entertainment distribution channels. The Jason Blum-produced thriller, a reimagining of  was initially released at a premium rental rate of $19.99. It was subsequently made available for purchase or rental through digital retailers, at regular prices, on May 12, and two weeks later was issued on 4K Ultra HD, Blu-ray Disc and DVD. The film is a reimagining of the 1897 H.G. Wells novel and follows a woman (Elisabeth Moss) who thinks she is being stalked by her abusive lover even after his apparent suicide.

No. 6: The Call of the Wild, $62,342,368: The adventure film was released theatrically in the United States on Feb. 21 by 20th Century Studios. It was given an early digital release on March 27 by 20th Century Studios owner the Walt Disney Co. and issued on 4K Ultra HD Blu-ray, Blu-ray Disc and DVD on May 12. Based on Jack London’s novel of the same name, it stars Harrison Ford. Set during the 1890s Klondike Gold Rush, the film follows a dog named Buck as he is stolen from his home in California and sent to the Yukon, where he befriends an old outdoorsman and begins a life-altering adventure.

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No. 7: Onward, $61,555,145: This computer-animated fantasy film was produced by Pixar Animation Studios and released theatrically by Walt Disney Pictures on March 6, five days before the WHO declared a global coronavirus pandemic. On March 20 Disney announced the film’s immediate availability for digital purchase at a premium price, and further said it would make the film available through its Disney+ streaming service on April 3. The film was finally issued on 4K Ultra HD Blu-ray, Blu-ray Disc and DVD on May 19. Onward, featuring the voices of Tom Holland, Chris Pratt, Julia Louis-Dreyfus, and Octavia Spencer, follows two elf brothers who set out on a quest to find an artifact that will temporarily bring back their dead father.

No. 8: Tenet, $57,929,000: The only film released during the pandemic period to crack the top 10, the latest mind-bending thriller from director Christopher Nolan hit theaters Sept. 3 after being delayed from July. Nolan and Warner Bros. had hoped the film would re-ignite the box office as the pandemic was winding down, but it didn’t happen. With audiences still too wary about the coronavirus to flock to theaters, it debuted with only about $10 million in the U.S., well below its pre-pandemic expectations (it marked Nolan’s lowest domestic opening since his breakout indie hit Memento nearly 20 years ago, and his lowest domestic gross since 2006’s The Prestige. Nolan’s previous film, 2018’s Dunkirk, opened to $50.5 million en route to $189.7 million domestically. The convoluted story didn’t help matters either, involving secret agents moving forwards and backwards in time trying to either start or prevent World War III. Despite a global haul of $362 million, Warner reportedly lost $100 million on the release, which likely prompted the studio to announce its controversial strategy of releasing its film slate through 2021 simultaneously in theaters and on the HBO Max streaming service, a move that Nolan slammed.

No. 9: The Croods: A New Age, $36,725,650: The Universal Pictures sequel opened theatrically Nov. 25 and became available to home audiences on Dec. 17, at a PVOD rental price of $19.99. The computer-animated film, directed by newcomer  Joel Crawford, features returning voice actors Nicolas Cage, Emma Stone, Ryan Reynolds, Catherine Keener, Clark Duke, and Cloris Leachman, with newcomers Peter Dinklage, Leslie Mann, and Kelly Marie Tran.

No. 10: The Gentleman, $36,471,795: This British-American action comedy film was written, directed and produced by Guy Ritchie. The film — with an ensemble cast includein Matthew McConaughey, Charlie Hunnam, Henry Golding, Michelle Dockery, Jeremy Strong, Eddie Marsan, Colin Farrell, and Hugh Grant — follows an American marijuana kingpin in England who is looking to sell his business, setting off a chain of blackmail and schemes to undermine him. The Gentlemen was released theatrically in the United States on Jan. 24 by STXfilms. It was originally slated for digital release on April 7, but the date was moved up to March 24 due to the pandemic. The film was issued as scheduled on 4K Ultra HD Blu-ray, Blu-ray Disc and DVD on April 21.

This list was updated on Jan. 10, 2021.

Netflix Drops Trailer on Its Comedic Take on 2020

Many people would count 2020 among the worst years in recent history. Now Netflix has made a comedy about it called “Death to 2020,” which launches Dec. 27. Created by Charlie Brooker and Annabel Jones, the team behind the Netflix original series “Black Mirror,” the documentary-style program features well-known actors (Samuel L. Jackson, Hugh Grant and Lisa Kudrow, among others) playing characters reminiscing about the dreadful 12-month period that saw the birth of a pandemic, economic loss and politics on steroids, among other issues.

“Those who only know me through ‘Black Mirror’ may not realize that when not writing speculative sci-fi about people frowning at smartphones, I’ve spent years making comedy shows in the U.K. — including many topical comedy specials,” Brooker said in a statement.

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Brooker said “Death to 2020” features fictional characters discussing real events in a “bombastic” mockumentary, that he said is quite a bit sillier than the title would suggest.

“It felt like an apt format for Netflix, which is known for high-end documentaries, but also like a good opportunity to create a different kind of comedy special that deals with the year head-on, while also showcasing some brilliant performers,” Brooker said.

DEG: Consumer Spending on Digital Sales, Rentals Rose 54% in Q2

As expected, the transactional home entertainment market posted significant consumer spending gains in the first half of 2020, fueled by stay-at-home orders and restaurant, bar and business closures that began in mid-March due to the coronavirus pandemic.

Consumer spending on digital entertainment purchases and VOD rentals in April, May and June shot up 54% according to numbers released Aug. 20 by DEG: The Digital Entertainment Group, a trade association for the home entertainment industry.

DEG numbers do not include premium VOD or AVOD data. During a DEG presentation on the first-half data, DEG president and CEO Amy Jo Smith said the trade group will begin tracking “emerging product” PVOD “assuming it stays in the marketplace.”

“Consumers really do want to get new and fresh content, and they are willing to pay for it,” she noted of the new distribution model.

Consumers spent an estimated $2.99 billion on digital transactional entertainment in the first six months of this year, one-third more than the $2.25 billion they spent in the first half of 2019.

Digital sales of movies, series and other filmed content was up 57% in the second quarter and 33% in the first half, while transactional streaming, in which consumers “rent” a program for a limited time, generally 48 hours, was up 50% in Q2 and 33% in the first six months of the year.

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Digital transactions eclipsed disc sales and rentals, DEG numbers show. Combined DVD and Blu-ray Disc sales in the first half fell 17% to an estimated $1.27 billion, although sales rebounded significantly in the second quarter, down just 11% compared with a drop of more than 22% in the first quarter.

Disc consumers were looking for bargains, noted Judith McCourt, of Redhill Group, during the DEG presentation.

“We saw particularly strong demand for DVDs that were priced under $10 and for DVDs that were priced under $6,” she said.

The tendency among some studios and independent suppliers to release lesser-known titles only on DVD and digital, skipping Blu-ray Disc, also appeared to pay off. DEG said that after years of double-digit declines, spending on DVD was down just 6% in the second quarter, with sales of budget-priced discs actually up 3%.

Total sales, physical and digital, rose nearly 19% in the second quarter and 4.9% in the first half, while total rentals were up 15% in the second quarter and 9% in the first half.

Combined, consumer spending on specific transactions, either sales or rentals, rose to $4.83 billion in the first half of 2020, from $4.54 billion in the first half of 2019, while spending in the second quarter soared to $2.45 billion from $2.09 billion in Q2 of 2019 — an uptick of more than 17%.

Earlier this month, Media Play News reported that the home entertainment divisions of five major studios reported significant gains in second-quarter sales, despite the absence of fresh theatrical product.

One factor was the re-routing of movies headed for theaters, such as Trolls World Tour, to early digital release; the other was a spike in demand for older films.

DEG reported that digital sales and rentals of theatrical catalog movies rose 66% in the second quarter.

TV product, presumably led by Warner Bros., also posted significant gains in digital transactions, with consumer spending in the second quarter up 72% on purchases and 120% on rentals. Internet VOD TV content consumption was up a whopping 119% overall in the second quarter.

“We are looking at numbers that we have not traditionally seen, but these are not traditional times,” McCourt said during the presentation.

Cable VOD, too, saw a jump in the second quarter despite cord-cutting, growing 11% over the same quarter in 2019 after actually falling 5% in the first quarter, McCourt said.

Despite these gains, subscription streaming continues to dominate consumer home entertainment spending. The DEG estimated that streamers generated $10.3 billion in consumer spending in the first six months of 2020 and $5.54 billion in the second quarter, respective gains of 37% and 42% from the comparable periods last year.

Total consumer spending on home entertainment across digital and physical formats in the first six months of 2020 was $15.1 billion, DEG reported, up 25.7% from the $12 billion consumers spent in the first half of 2019. Second-quarter spending is pegged by the DEG at $7.98 billion, up 33.6% the second quarter of 2019.

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For the second quarter, subscription streaming accounted for 69.3% of the total home entertainment market, compared with 8% for disc sales, 3.1% for disc rentals, 10.8% for electronic sellthrough, and 8.7% for VOD. Excluding SVOD, digital transactions outperformed physical ones 63.8% to 36.2%.

For the first half of 2020, subscription streaming accounted for 68% of the total home entertainment market, compared with 8.4% for disc sales, 3.8% for disc rentals, 10.7% for electronic sellthrough, and 9.1% for VOD. Excluding SVOD, digital transactions outperformed physical ones 61.8% to 38.3%.

Additional reporting by Stephanie Prange and John Latchem.