SVOD Again Fuels Consumer Home Entertainment Spending in Q3 2019

Consumer spending on home entertainment rose 11% in the third quarter of 2019, according to the latest quarterly report from DEG: The Digital Entertainment Group.

Spending on digital purchases and streaming was up 19%, the DEG reported, fueling total Q3 consumer spending on all forms of home entertainment to more than $6.3 billion.

Subscription streaming, according to the DEG, solidified its position as the dominant way consumers watch movies, TV shows and other filmed content on demand, with subscription streaming leading the way at $4.1 billion, up nearly 25% from the third quarter of 2018. Earlier, data from digital measurement firm Conviva found a 63% increase in third-quarter (ended Sept. 30) video viewing hours.

During the third quarter of 2019, DEG says, consumers spent just under $700 million on digital purchases, up 13.1% from the third quarter of last year. A la carte streaming, the digital equivalent of renting a disc, fell nearly 10% to an estimated $448 million.

Total spending on digital came in at nearly $5.3 billion.

On the physical side, consumer spending on purchased Blu-ray Discs, DVDs and 4K Ultra HD discs came in at an estimated $736 million, down 13% from the prior year’s Q3. Including electronic sellthrough, consumers spent more than $1.4 billion to own content, about 2% less than in the third quarter of 2018.

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Disc rentals at physical video stores suffered another big drop, coming in at just $56.2 million, down 21.5% from the prior year. Kiosk rentals, mostly Redbox, generated an estimated $214.4 million, down 21.4%, while subscription disc rental — carried mostly by Netflix’s legacy disc-by-mail rental business — was off 19% to $72.6 million.

The box office value of films that were released for home consumption in the third quarter was down 1.5%, the DEG reported.

Top disc sellers in the third quarter of 2019 included Disney’s Avengers: Endgame and live-action Aladdin remake, along with Lionsgate’s John Wick: Chapter 3 — Parabellum and Warner’s Shazam!, according to NPD VideoScan data.

For the first nine months of 2019, consumers spent an estimated $18.34 billion on home entertainment, an 8.3% uptick from the first nine months of 2018. Subscription streaming accounted for more than 63% of total home entertainment dollars spent, or $11.6 billion. Total digital spending accounted for nearly 82% of total consumer spending, or just under $15 billion, while packaged-media sales and rentals trailed at 18.4%, or $3.4 billion.

Willow Bay Recalls Career, Praises Young People in Accepting DEG’s Hedy Lamarr Award

Willow Bay, dean of the USC Annenberg School for Communication and Journalism, received the third annual “Hedy Lamarr Award for Innovation in Entertainment Technology” from DEG: The Digital Entertainment Group Nov. 12 on the Sony lot in Culver City, Calif.

The DEG created the Innovation Award to recognize female executives in the fields of entertainment and technology who have made a significant contribution to the industry.

Presenter Robin Tarufelli, managing director of Deloitte and chair of the DEG’s Canon Club, noted that “Dean Bay is widely known for her journalism work on camera as a reporter and anchor at various news agencies, including ABC’s ‘Good Morning America,’ NBC’s ‘Today Show’ and CNN’s ‘Moneyline.’”

She also noted her contribution to digital journalism.

“Like Hedy, few people know Dean Bay is also a powerful inventor in the field of digital communication,” she said. “As a senior editor, she helped pioneer Huffington Post online, where she led various verticals including the launch of business and lifestyle. At USC, she launched the USC Annenberg Center.”

In accepting the award, Bay expressed the regret of husband Bob Iger, chairman and CEO of The Walt Disney Co., that he couldn’t attend the event.

“My husband Bob had to launch Disney+ today,” she said. “He really wanted to be here, but they’ve got something else going on.”

Bay praised the career of Lamarr, a Hollywood actress who was also an inventor with several patents.

“I got no patents,” Bay joked, adding, “I’m blown away to be mentioned in the same sentence as Hedy Lamarr, a true pioneer not just in her inventions but in forging new ways to be a woman fully in all dimensions.”

She noted that Lamarr is “the mother of Wi-Fi” and was posthumously inducted into the National Inventors Hall of Fame.

“I bet not a lot of those inventors looked like Hedy,” Bay said, noting “how much all of our lives thanks to digital and wireless are advanced because of her and how much my career actually was inspired from her scientific advance.”

Bay recalled her days as the first female anchor of CNN’s “Moneyline,” where she interviewed Steve Jobs, Jeff Bezos and others in the late 1990s.

“In those days they would say things like, ‘I don’t know whether men, when the markets are heading downward, we just don’t know whether men want to get bad financial news from a woman,’” she recalled. “Somehow they managed.”

She also worked alongside The Huffington Post’s Ariana Huffington, who she called “one of the great digital media pioneers.”

“It was when blogs first came about,” she recalled. “It was when comments first came about. It was really in many ways one of the precursors of social media.”

She then went on to become the first female dean of the USC Annenberg School.

During her acceptance speech, she praised members of the younger generation, including her students at USC, for their passion.

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“We are watching a very young generation emerge into their roles as innovators and leaders on a very public stage,” Bay said. “We know them on a first name basis — Malala, Emma, Greta, Chanel. Malala used her voice to educate us about women’s education. Greta [Thunberg] stunned the world with her speech before the U.N. on climate change. Emma Gonzalez in Parkland is becoming one of this country’s leading voices on gun control. And there’s Chanel Miller, who wrote Know My Name, in which she courageously uses her voice and shares her story of sexual assault. These young women are making their mark in the public sphere, and they are inspiring so many of us.”

She exhorted the audience to help the younger generation to make their mark.

“Find a young person in your orbit and reach out to them,” she said. “We need to help them live up to their potential, and in doing that, we will live up to ours.”

Bay shared the spotlight with a student from her school. The DEG also presented the “Hedy Lamarr Achievement Award for Emerging Leaders in Entertainment Technology,” which recognizes female college students whose studies in the fields of entertainment and technology have shown exceptional promise, to Maya Tribbitt. Tribbitt is earning her bachelor’s degree in journalism and international relations at the USC Annenberg and the USC Dornsife College of Letters, Arts and Sciences, and will receive a financial award to continue her education.

Tribbitt interned at Amazon and worked for Kamala Harris in her Los Angeles office.

DEG Fetes 2019 Hedy Lamarr Award Recipients

Willow Bay, dean of the USC Annenberg School for Communication and Journalism, received the third annual “Hedy Lamarr Award for Innovation in Entertainment Technology” from DEG: The Digital Entertainment Group Nov. 12 on the Sony lot in Culver City, Calif.

The DEG created the Innovation Award to recognize female executives in the fields of entertainment and technology who have made a significant contribution to the industry.

In her acceptance speech, Bay said her husband Bob Iger unfortunately couldn’t attend as he had another engagement, launching the new streaming service Disney+.

The DEG also presented the “Hedy Lamarr Achievement Award for Emerging Leaders in Entertainment Technology,” which recognizes female college students whose studies in the fields of entertainment and technology have shown exceptional promise, to Maya Tribbitt. Tribbitt is earning her bachelor’s degree in journalism and international relations at the USC Annenberg and the USC Dornsife College of Letters, Arts and Sciences, and will receive  a financial award to continue her education.

DEG: Home Entertainment Spending Posts 7% Gain in First Half of 2019

Consumers spent nearly $6 billion on home entertainment in the second quarter of 2019, a 7% gain from the same period last year.

The gain came despite a nearly 10% year-over-year decline in the box office value of movies that became available for in-home viewing during the quarter, according to DEG: The Digital Entertainment Group.

Granted, the rising reliance of subscription streaming services like Netflix on original content, mostly digital TV series, has made comparisons between home entertainment spending and the box office earnings of movies a bit less relevant.

But the disparity still suggests a growing number of consumers prefer to enjoy their entertainment at home.

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For the first six months of the year, consumer spending on home entertainment came in at just over $12 billion, a 6.7% uptick from the first half of 2018.

The box office value of films released to the home during that same period, meanwhile, fell more than 15.5% to just over $5 billion.

As expected, increases in consumer spending on streaming were largely responsible for the gains in overall home entertainment spending.

DEG estimates consumers spent nearly $7.5 billion on subscriptions to Netflix, Amazon and other streaming services in the first half of this year, a 22% increase from the first half of 2018. Spending in the second quarter, which ended June 30, rose more than 23% to $3.89 billion.

The only other category to post an increase in consumer spending during the first half of 2019 was electronic sellthrough (EST), or the digital purchase of movies and other content, which generated an estimated $1.2 billion in consumer spending, up 3.3% from the first six months of 2018.

Breaking the numbers apart, DEG says first-half spending on theatrical EST was up nearly 8%, while spending on video on demand for theatrical movies rose more than 9%. Total transactional VOD spending in the first half of the year came in at just over $1 billion, a decline of nearly 4% from the prior year’s first half.

Combined DVD and Blu-ray Disc sales for the first half of 2019 amounted to an estimated $1.5 billion, down about 21% from the first six months of 2018. In the second quarter, disc sales generated $716 million in revenue, down 19.3% from the second quarter of 2018.

Combined disc and digital ownership for the half-year was $2.75 billion, down 11.8% from the previous year. Content ownership in the quarter was $1.27 billion, down 12.1% from the same period a year ago.

USC Annenberg Dean Willow Bay to Receive DEG Hedy Lamarr Award

Willow Bay, dean of the USC Annenberg School for Communication and Journalism, will receive the third annual “Hedy Lamarr Award for Innovation in Entertainment Technology” from DEG: The Digital Entertainment Group this fall.

The DEG created the Innovation Award to recognize female executives in the fields of entertainment and technology who have made a significant contribution to the industry.

The DEG also will present the “Hedy Lamarr Achievement Award for Emerging Leaders in Entertainment Technology,” which recognizes female college students whose studies in the fields of entertainment and technology have shown exceptional promise. Maya Tribbitt, who is earning her bachelor’s degree in journalism and international relations at USC Annenberg and the USC Dornsife College of Letters, Arts and Sciences, will receive the Emerging Leader honor along with a financial award to continue her education.

The awards will be presented in Los Angeles to coincide with the 105th anniversary of Lamarr’s birth Nov. 9, 1914.

“We are thrilled to present DEG’s 2019 Hedy Lamarr Awards to Dean Willow Bay, for her traditional and digital platforms, and USC student Maya Tribbitt,” said DEG president and CEO Amy Jo Smith in a statement. “These communicators truly embody Hedy Lamarr’s dedication to innovation in media and technology.”

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Bay, a broadcast journalist, is the first female dean of the USC Annenberg School for Communication and Journalism and holder of the Walter H. Annenberg Chair in Communication. Since joining the USC Annenberg faculty in 2014 as director of the School of Journalism, she has launched the school’s state-of-the-art Media Center in Wallis Annenberg Hall, expanded the school’s partnerships with key media and technology partners, and accelerated curricular innovations, including an expansion of the school’s experiential education and career development programs, according to the DEG. Bay’s work to ensure that current and future communicators are fluent writers across many digital platforms was recognized with the Award of Honor from the PEN Center USA. She is married to Walt Disney Co. CEO Bob Iger.

“I am honored to receive this award inspired by Hedy Lemarr’s relentless commitment not only to pushing the boundaries of invention, but also to forging new roles for women in the entertainment and technology industries,” Bay said in a statement. “At USC Annenberg, we prepare our students to lead with this same level of intelligence, curiosity and courage as they shape the future of media, technology and culture.”

Austrian-American actress Lamarr was a Hollywood legend who is best known for her roles in film classics including Samson and Delilah, The Strange Woman and Tortilla Flat. She was also a lifelong inventor whose innovative work included pioneering “frequency hopping,” which became the foundation for spread spectrum technology. Conceived by Lamarr and composer George Antheil for radio guidance systems and patented in 1942, this highly secure technology resists interference and dropout, and is utilized today for a variety of cellular, Wi-Fi and Bluetooth applications.

To determine the award winners, DEG enlisted its Canon Club Advisory Board, which comprises a cross-section of leaders representing the entertainment, technology, IT and consumer electronics industries. Among other factors, the judging panel based its decisions on the candidates’ embodiment of the principles of innovation, engagement and excellence.

DEG Creates Advisory Board for Canon Club

DEG: The Digital Entertainment Group May 20 announced the creation of an advisory board of senior executives for its Canon Club, an organization in which women at all levels and in all sectors of digital media share knowledge and build their business networks.

The 10 appointed Advisory Board members will provide input on Canon Club event programming, rotate as host at speaker-driven salons and social/networking events, serve as founding mentors in the “Four Cups of Coffee” mentoring network, and judge the annual Hedy Lamarr Awards for Women in Entertainment and Technology.

The advisory board will be led by chair Robin Tarufelli of Deloitte and vice chair Meri Hassouni of Giant Interactive. Other board members include Loren Nielsen, DTS; Sofia Chang, HBO (DEG board director); Dametra Johnson–Marletti, Microsoft (DEG board director); Karin Gilford, Movies Anywhere; Andrea Downing, PBS Distribution (DEG board director); Cheryl Goodman, Sony Electronics; Nadia Haney, Universal Pictures Home Entertainment; and Darcy Antonellis, Vubiquity.

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“I’m thrilled to work with these seasoned executives to take Canon Club to the next level,” said Amy Jo Smith, president and CEO of the DEG, in a statement. “Many of our advisors are longtime members and active supporters of DEG, and each of them comes to this new role enthusiastically and with a strong commitment to increase opportunities for women in entertainment and technology.”

The appointment of the board coincides with the launch of new benefits, activities and events for Canon Club members and a renewed focus on networking and career development.  DEG will help facilitate networking and career development. Programs include “Four Cups of Coffee,” which will match women in search of mentors with more senior executives for a cup of coffee and career conversation up to four times each year. Mentors (In addition to advisory board members) include Beth Kearns, 20TH Century Fox; Heathyr Jozel-Garcia, ABC Studios; Samara Winterfeld, DTS; Ken Williams, ETC@USC; Kejo Swingler, HBO; and Rachel Crang, Paramount Pictures. Another program is the DTS Management Training Program under which sponsor DTS will invite up to 20 Canon Club members currently in management positions to participate in a one-day management training program, with the goal of preparing more women for senior leadership positions in digital media. All eligible female executives at DEG member companies may apply.

Canon Club Members are invited to meet the advisors and mentors and sign up for coffee with a mentor at a kick-off networking reception scheduled for the evening of June 5 at Sony Pictures Studios in Culver City. Visit degonline.org for more information.

Canon Club is made possible by the support of presenting sponsor Deloitte, and sponsors DTS and PBS Distribution.

All executives and staff at DEG Member companies are automatically members of Canon Club and are invited to participate in Canon Club activities at no additional cost. Individuals outside DEG Member companies can purchase annual memberships for $199 per year (half price for students). Companies that are not members of DEG can purchase Canon Club sponsor memberships by emailing Andi Elliott (andi@degonline.org).

DEG: Q1 2019 Consumer Spending on Home Entertainment Up 6.4%

Fueled by digital — subscription streaming as well as transactional  — home entertainment spending in the first quarter of 2019 rose 6.4% from the first quarter of the previous year, to $6.04 billion, according to DEG: The Digital Entertainment Group.

Subscription streaming, led by Netflix, rose 21% in the quarter to an estimated $3.6 billion, DEG said, citing IHS Markit estimates.

The increase shows that with the reliance by streamers on original and TV content, the at-home sector is becoming increasingly impervious to the whims of the box office.

The theatrical value of films that came to the home market in the first quarter, according to DEG, was down nearly 20%.

Take streaming out of the equation and consumer spending on home entertainment was down 9.3%.

Consumer spending on digital transactional video, both purchase (electronic sellthrough, or EST) and limited-time viewing, came in at nearly $1.23 billion, up 4.6% from just under $1.18 billion in the first quarter of 2018.

EST sales rose 6.7% to $665.5 million, up from $623.7 million, while limited-time VOD, the digital equivalent of rental, generated an estimated $564.1 million in consumer spending, up 2.3% from $551.6 million.

Disc sales continued to decline, falling below the $1 billion mark in the first quarter of 2019 to an estimated $822.25 million, a drop of 23% from $1.06 billion in the first quarter of 2018 — pretty much in line with the decline in the collective box office earnings of movies that were released to the home market in the same time frame, to $2.89 billion from $3.59 billion in the year-ago quarter.

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The disc rental market fared better, with consumers spending just under $400 million to rent DVDs and Blu-ray Discs from Redbox kiosks, freestanding video rental stores and Netflix’s disc-by-mail rental option. That’s down 14.6% from the prior year’s first quarter.

Citing CTA numbers, DEG noted “there is continued significant growth among 4K Ultra HD hardware products,” with Ultra HD TVs now in about 53.4 million households, an increase of 55% from a year ago. The number of households with at least one 4K Ultra HD Blu-ray playback machine rose 63% to 14 million.

The top-selling disc release of the first quarter, according to NPD Group’s VideoScan tracking service, was 20th Century Fox’s Bohemian Rhapsody.

The top 10 DVD and Blu-ray Disc sellers of 2019, through March 31:

  1. Bohemian Rhapsody (Fox)
  2. Aquaman (Warner)
  3. Ralph Breaks the Internet (Disney)
  4. Fantastic Beasts: The Crimes of Grindelwald (Warner)
  5. A Star Is Born (2018) (Warner)
  6. The Grinch (Universal)
  7. Spider-Man: Into the Spider-Verse (Sony Pictures)
  8. Mary Poppins Returns (Disney)
  9. Halloween (2018) (Universal)
  10. Creed II (Warner)

Source: NPD Group

EMA Growing Membership Commitment and Expanding Into OTT, Says CEO

LAS VEGAS — The Entertainment Merchants Association hailed the growing commitment of its membership at a meeting Jan. 8 during CES.

“The engagement of our members over the past year I think is more than we’ve ever seen,” said president and CEO Mark Fisher.

“It’s been an interesting year in the industry and for our association,” he said, noting the growth of digital purchase storage locker Movies Anywhere and the expansion and churn in the OTT space (including pending streaming services from Disney and WarnerMedia).

“We initiated a focus on OTT channels” in the past year, he said, in addition to EST and disc, which “is not dead.”

He noted that the EMA had a “very successful OTT conference” at the Los Angeles Entertainment Summit in July, which had to downsize its budget.

The organization “learned how to operate a conference at lower cost,” during the July 2018 LAES.

But the EMA is focused on the entertainment delivery systems of the future. Fisher noted that, in July, DEG: The Digital Entertainment Group, the EMA and MovieLabs formed the Digital Supply Chain Alliance to strengthen the digital supply chain.

“That alliance have proven to show really rapid results,” he said.

Mitch Mallon, CEO of Stadium Media and chair of the digital EMA steering committee, added that EMA digital membership has grown, digital events have expanded and that the committee has created six white papers.

In the coming year, the committee “will be focusing on how OTT is starting to move out into the European marketplace,” he said, including launching a new project to list digital platforms around the world.

Steve Apple, VP, industry sales at the EMA, moderated a discussion on the OTT market.

Panelist Jason Peterson, CEO of GoDigital Media Group, noted that international markets and cultures require a different approach, including mobile, non-cash, non-banked payment opportunities.

“We’ve really focused on the Hispanic audience,” he said.

Panelist Tricia Lee, SVP, product and development, Sony New Media Solutions, noted that focusing on a rabid fan base can be key in the OTT space, referencing her work building Funimation’s service, which has “hyper-attention fans” in the anime space.

The key is authenticity, she said, adding consumers “are looking for shared experiences, and it has to be authentic.”

Services “need culturally significant content to cut through that clutter,” Peterson added.

DEG Forms Direct-to-Consumer Alliance

DEG: The Digital Entertainment Group has formed the DTC Alliance as a subset of DEG membership.

“Every major media company and TV network will launch a Direct-to-Consumer (DTC) streaming service in the next five years representing a significant new chapter in how television and film content is purchased, accessed and consumed,” the DEG stated in a release. “As DTC streaming currently is a longtail situation with a few high-reach apps and many low-reach services, DEG’s DTC Alliance is designed to support direct-to-consumer media services of all sizes to tackle difficult challenges and coordinate voluntary best practices and initiatives; advocate for the industry by presenting a common front to the commercial community; and promote member channels through campaigns aimed at building awareness among consumers, as well as through industry-leading events.”

Under the umbrella of the DTC Alliance, DEG has established six committees to set objectives and agendas in the following areas: Marketing Nomenclature, Data Analytics, International Expansion, Rights Repository, Title Availability Directory and Uniform Metadata Standards.

“With the DTC Alliance, DEG is bringing together DTC content companies and service providers to build a robust and efficient marketplace for all players, and to promote the new DTC experience to consumers,” said Amy Jo Smith, DEG president and CEO. “DEG has a track record of more than 20 years in bringing new media platforms, including DVD and Blu-ray Disc to market. We are very excited to apply this extensive market-building experience to the DTC arena, and encourage all appropriate companies to participate in setting the DTC Alliance’s initial objectives and a forward-looking agenda for this new industry.”

Filmmaker Christopher Nolan to Receive DEG’s Vanguard Award

DEG: The Digital Entertainment Group will present its inaugural Vanguard Award to Academy Award-nominated filmmaker Christopher Nolan.

The award presentation will take place during a reception at the 4K Ultra HD Summit to be held Nov. 6 at the Skirball Cultural Center in Los Angeles.

The DEG Vanguard Award is in recognition of Nolan’s place at the forefront of filmmakers using groundbreaking technology to deliver increased scale and resolution, enhanced color and immersive audio to film audiences both in cinemas and in the home theater environment. Nolan has been a longtime advocate of the best home viewing experience available to consumers.

The director, writer and producer most recently earned dual Academy Award nominations, for Best Director and Best Picture, for Dunkirk, which in July 2017 received the largest 70mm release in the last quarter century. His filmography also includes InterstellarInception, The Dark Knight TrilogyThe Prestige, and Memento, for which he received his first Oscar nomination, for Best Original Screenplay.

With the December 2017 release of the seven film “The Christopher Nolan Collection” in 4K Ultra HD Blu-ray by Warner Bros. Home Entertainment, Nolan became the filmmaker with the largest number of films available in the most advanced home-based viewing format, according to the DEG.

The 4K Ultra HD Summit, presented by the DEG and the Ultra HD Alliance, will advocate and educate about the benefits of 4K Ultra HD televisions and content while highlighting the changes to all things 4K. The goal of the Summit is to help consumers understand the benefits of 4K UHD with HDR and provide information about new hardware and software products for the holiday buying season.

The program will focus on advancements in 4K UHD technology, increasing affordability of the technology, and widening availability of content.

For information about attending The 4K Ultra HD Summit, email Shannon@degonline.org.
For sponsorship opportunities, email Andi@degonline.org.
For speaking opportunities, email Marcy@degonline.org.