Consumer Q4 Home Entertainment Spending Up 9%

Home entertainment spending in the fourth quarter of 2019 reached $6.8 billion, up 9% from $6.3 billion spent in the final three months of 2018, according to data released by DEG: The Digital Entertainment Group.

Box office revenue for the corresponding period fell 3%.

Subscriptions to streaming services such as Netflix, Hulu, Amazon Prime rose 26% from the same period a year ago to $4.3 billion, comprising 63% of total home entertainment revenue. New services Disney+ and Apple TV+ became available during the fourth quarter.

Electronic sellthrough of movies and TV shows rose just under 1%, to $670 million in the quarter. VOD, the digital equivalent of a film rental, dropped 7%, owing mostly to consumers cord-cutting their cable packages. However, VOD revenue through Internet services grew 10% in the quarter, according to the DEG.

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Sales of packaged media — Blu-ray and DVD formats — dropped 18% during the three-month period, from $1.2 billion a year ago to just under $1 billion. Quarterly packaged-media rentals were down 19% to $338 million.

Still, it was the best quarter of the year for disc sales, thanks in large part to holiday shopping. On the transactional side of home entertainment (excluding SVOD), consumers opted for the DVD or Blu-ray version of a title 54% of the time in the quarter, compared with 46% for digital versions. That’s up from 49.9% from the first three quarters of the year, though it’s down from the 58% share packaged media had in Q4 2018, and a 66% share in Q4 2017.

Outside the realm of SVOD, consumers still prefer owning their titles over renting them by a nearly 2-to-1 margin, with disc and electronic sellthrough accounting for $1.69 billion in the quarter, or 67% of transactions, compared with $818.1 billion for disc rentals and VOD. That’s a slightly better margin than the year as a whole, which saw ownership account for 63% of transactions, $5.88 billion compared with $3.39 billion for rentals.

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Top-selling titles in the quarter included Disney’s Toy Story 4 and The Lion King remake, and Sony Pictures’ Spider-Man: Far From Home, according to Media Play News research estimates.